Decomposing change in energy input-output coefficients

Abstract

In updating input-output models using partial information from a new time period, it is important to know the relative contributions of model components in order to determine which new data lead to the greatest improvement in accuracy. In this work, using the standard energy input-output model, inverse coefficient change attributable to changes in the economy's direct energy requirements, direct non-energy requirements, and the composition of output within aggregate sectors is separated and measured. Results show that very accurate updated energy intensities can be estimated when updated direct energy flows and changes in the composition of output are accounted for.