The Effect of Aggregation on the Empirical Identification of Key Sectors in a Regional Economy: A Partial Evaluation of Alternative Techniques

The open nature of regional economies requires that careful attention be paid to the magnitude of intraregional interindustry relationships when decisions about the allocation of investment are made. A number of methods have been proposed for the purposes of identifying key sectors in a national economy using input–output models. This research reports on attempts to identify key sectors at the regional level using the 1963 and 1967 Washington State input–output models at various levels of aggregation. The lack of consistency of identification of key sectors by the various methods suggests that these approaches have limited utility at the regional level.