THE MODIFIED RAS METHOD FOR UPDATING RECTANGULAR INPUT-OUTPUT TABLE

EXPECTATION MODEL

Abstract

The RAS method aims to update a technical coefficient matrix of Leontief type inputoutput table based on the assumptions of substitution and fabrication effects. It is well known that a direct application of the RAS method deduces a significant bias in some industry sectors which have fast growth. This paper proposes an expectation model to adjust initial values of selected elements from base matrix based on historical data, and applies it to the modified RAS method for updating of Japan interregional rectangular input-output table. The accuracy and validity of the model were confirmed through a case study.