Linking Adjacent Prefectures’ Multi-Regional Input–Output Tables

Chapter 7 focuses on linking adjacent prefectures’ multi-regional input-output tables (MRIOTs). In this chapter, using the IOTs for the three prefectures of Aichi, Gifu, and Mie, respectively, we first break down each prefecture’s table into the MRIOTs with several small areas for each. Then, we integrate the three MRIOTs into one MRIOT, using the estimated commodity flows among small areas by sector. This MRIOT, with 14 areas and 186 sectors, targets three prefectures, Aichi, Mie, and Gifu, which is called the Tokai region. Why do we break down the prefecture IOTs into those of several small areas and integrate the small area IOTs into one multi-regional IOT? We think that such a type of IOT makes it possible to solve the analytical problem that a region identified in terms of economic activity is not necessarily the same as the administrative region. We introduce a method to recompile our MRIOT of the Tokai region and discuss the structural characteristics of the Tokai region.