Using Network Science to Quantify Economic Disruptions in Regional Input-Output Networks

Abstract

Input-output (IO) tables provide a standardised way of looking at interconnections between all industries in an economy, and are often used to estimate the impact of disruptions or shocks on economies. IO tables can be thought of as networks—with the nodes being different industries and the edges being the flows between them. We develop a network-based analysis to consider a multi-regional IO network at regional and sub-regional level within a country. We calculate both linear matrix-based IO measures (‘multipliers’) and new network theory-based measures, and contrast these measures with the results of a disruption model applied to the same IO network. We find that path-based measures (betweenness and closeness) identify the same priority industries as the simulated disruption modelling, while eigenvector-type centrality measures give results comparable to traditional IO multipliers, which are dominated by overall industry strength.