Test of Technology Assumptions for the Estimation of Symmetric Input-Output Table in Iran: An Econometric Approach

Input-Output Table (IOT) analysis is important especially concerning trade, environments, productivity for planning and policy making. Quality of the analyses depends on the estimation of Symmetric Input-Output Tables (SIOT) and also the use of the types of technology assumption (Product Technology versus Activity Technology). The choice of the type of technology concerning SIOT estimation has been left to the member countries by the UN Manual. Choosing technology assumption in Iran has been based on expert judgments, institutional data requirement and avoiding negative elements. The question which arises here is that, would it be possible to choose the appropriate type of technology for estimation of SIOT in Iran? The main aim of this paper is to suggest an econometric test of hypothesis method concerning the choosing of technology type. For this reason, we suggest a Fisher type (F) test in which the Product Technology or the Activity technology will be chosen. If the Product Technology is dominant, the SIOT will be estimated based on the Product Technology. Otherwise, the Activity Technology may be applied. The results of the tests concerning 2011 SIOT have shown that Product Technology Hypotheses is more appropriate for some sectors, whereas Activity Technology Hypotheses for other sectors are not valid.