Regional purcase coefficients estimates from Value-Added Tax data

Regional input-output models are generally developed with non- survey method that adjust the national table to reflect a region. These adjustments require data on the regional output levels, data on how value-added in a particular industry differs between the region and the nation, and the degree of trade between the region and the rest of the world. This paper describes a Value-Added Tax (VAT) method of estimating RPCs (Regional Purcase Coefficients) that is theoretically superior to traditional methods. Then empirical estimates of RPCs are developed using the VAT, LQ and SDP methods for the North-Trondelag County in Norway. The SDP multiplier impact estimates were often many times that of the VAT estimates.The impacts on spesific sectors are overestimated even more. These results suggest the VAT should be used when available for developing RPCs for non-survey models. In the USA and Australia, the only two major countries without VAT, the results suggest that primary data methods should be used for estimating RPCs in principal sectors.