Adjustment of Input–Output Tables from Two Initial Matrices

Abstract

The compilation of the information required to construct survey-based input–output (I–O) tables consumes resources and time to statistical agencies. Consequently, a number of non-survey techniques have been developed in the last decades to estimate I–O tables. These techniques usually depart from observable information on the row and column margins, and then the cells of the matrix are adjusted using as a priori information a matrix from a past period (updating) or an I–O table from the same time period (regionalization). This paper proposes the use of a composite cross-entropy approach that allows for introducing both types of a priori information. The suggested methodology is suitable to be applied only to matrices with semi-positive interior cells and margins. Numerical simulations and an empirical application are carried out, where an I–O table for the Euro Area is estimated with this method and the result is compared with the traditional projection techniques.