On the accuracy of gravity-RAS approaches used for inter-regional trade estimation: evidence using the 2005 inter-regional input–output table of Japan

Julio Gustavo Fournier Gabela

EconStor Open Access Articles and Book Chapters, 2020, vol. 32, issue 4, 521-539

Abstract: In contrast to international trade, it is still difficult to find regional trade statistics within a nation. Given that the gravity model continues to be very popular, we test two gravity-RAS approaches used for interregional trade estimation: a standard one and an extended version, which additionally estimates intra-regional flows. We assess the accuracy with the help of two measures and for different sectoral aggregation levels. For that, we use the survey-based 2005 interregional input–output table of Japan as a benchmark. Results show high overall accuracy levels for the standard approach, better than when using international data, albeit with heterogeneous errors for sectors and regions. We further find that the results of a multiregional input-output model are highly sensitive to the trade estimation approach and that errors slightly increase for increasing sectoral disaggregation levels. Results from an experiment based on a random number generator show how RAS influences results.

Keywords: Inter-regional trade estimation; gravity model; sectoral aggregation level; accuracy; input-output model (search for similar items in EconPapers)
JEL-codes: D57 R12 R15 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:224912

DOI: 10.1080/09535314.2020.1753662

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