The Introduction of Administration and Research Activities into Regional Input-Output Models

Input-output analysis has been used extensively to identify the interrelationships in local, state, regional and national economies. One type of economic activity that is prevalent in several states in the Northeast has not typically been included in regional input-output models: that carried on at administrative offices and auxiliary establishments. This paper appraises the need for a sector representing administration and auxiliary activities in regional I-O models in the Northeast and provides a method for estimating a direct requirements column for such a sector from secondary data. The method proposed is used to estimate the direct requirements column for this sector in an input-output model for Delaware. The importance of including administration and auxiliary activities in an input-output model used for impact analysis is demonstrated.