On the financial balance of input–output constructs: revisiting an axiomatic evaluation

Majeau‐Bettez, Guillaume; Wood, Richard; Strømman, Anders Hammer

doi:10.1080/09535314.2016.1166098

Cited by 2 publications

(2 citation statements)

References 26 publications

(42 reference statements)

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“…This fixed values might be explained by how EXIOBASE is being aggregated and built (Stadler et al, 2014). The production recipe of major basic metal products is being modelled from ecoinvent, assuming that each industry has its own specific way of production, irrespective of differences in production recipes at national level (Majeau-Bettez et al, 2016).…”

Section: Assessing the Optimum Resolution Level Of Sector Aggregationmentioning

confidence: 99%

The Impact of Sectoral Aggregation on Elasticities of Substitution Using Translog Cost Function

Hardadi¹,

Pauliuk²

2021

Preprint

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Economic models are widely used to simulate policy scenarios, in which elasticities are used as measures of substitutability between production inputs. These models need appropriate levels of sector aggregation to produce policy-relevant results and to capture the variations of input substitutability among different sectors, while still adhering to the monotonicity and concavity requirements of aggregate production function. The purposes of this study are (i) to assess the cost (production) functions that fulfill these requirements appropriately, (ii) to analyze the impact of sector aggregation on the elasticities, and (iii) to determine the optimum resolution level for modelling cost function. This study utilized two databases to construct an industry-level panel dataset for 1995–2016, EU-KLEMS to obtain the price indices of the capital and labor inputs, and time-series monetary EXIOBASE v3.6, in both current and constant prices, to obtain the monetary inputs and price indices of intermediate inputs. Dynamic translog in GMM estimation is selected to derive the elasticities of substitution on different levels of sector aggregation since it performs better in reducing concavity violations, compared to pooled and fixed-effect estimation method. Selecting a higher resolution level is preferred to produce better model fittings, but it occasionally results in more concavity violations. Modelling cost functions at a more aggregated level leads to a larger estimate of the elasticity of substitution. The optimized level of sector aggregation for modelling cost function obtained in this study is at 86 industry sectors, capturing the different elasticities of substitution in various mining and manufacturing sectors of basic materials and electricity production.

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Section: Assessing the Optimum Resolution Level Of Sector Aggregationmentioning

confidence: 99%

The Impact of Sectoral Aggregation on Elasticities of Substitution Using Translog Cost Function

Hardadi¹,

Pauliuk²

2021

Preprint

View full text Add to dashboard Cite

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“…), their introduction of negative coefficients (Almon ; ten Raa and Rueda‐Cantuche ), their economic credibility (Viet ; United Nations ), their capacity to respect fundamental balances (Kop Jansen and ten Raa ; Majeau‐Bettez et al. ), and their robustness to changes in production volumes or prices (Kop Jansen and ten Raa ).…”

Section: Introductionmentioning

confidence: 99%

Choice of Allocations and Constructs for Attributional or Consequential Life Cycle Assessment and Input‐Output Analysis

Majeau‐Bettez

Dandres

Pauliuk

et al. 2017

J of Industrial Ecology

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The divide between attributional and consequential research perspectives partly overlaps with the long-standing methodological discussions in the lifecycle assessment (LCA) and input-output analysis (IO) research communities on the choice of techniques and models for dealing with situations of coproduction.The recent harmonization of LCA allocations and IO constructs revealed a more diverse set of coproduction models than had previously been understood. This increased flexibility and transparency in inventory modeling warrants a re-evaluation of the treatment of coproduction in analyses with attributional and consequential perspectives.In the present article, the main types of coproductions situations and of coproduction models are reviewed, along with key desirable characteristics of attributional and consequential studies. A concordance analysis leads to clear recommendations, which call for important refinements to current guidelines for both LCA/IO practitioners and database developers. We notably challenge the simple association between, on the one hand, attributional LCA and partition allocation, and on the one hand, consequential LCA and substitution modeling.

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On the financial balance of input–output constructs: revisiting an axiomatic evaluation

Cited by 2 publications

References 26 publications

The Impact of Sectoral Aggregation on Elasticities of Substitution Using Translog Cost Function

The Impact of Sectoral Aggregation on Elasticities of Substitution Using Translog Cost Function

Choice of Allocations and Constructs for Attributional or Consequential Life Cycle Assessment and Input‐Output Analysis

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