The effect of sector loss on the internal structure of regional economies

Abstract

The basic purpose of this study is to provide a useful framework in order to examine the various kinds of "hypothetical extraction" measures. In other words the purpose is to quantify how much the region’s output would change if a particular sector was not present. In accordance to the literature below sited a measure of the relative importance of any particular sector in a regional economy is found by extracting this sector. The impacts of these "extractions" on the sector multipliers, which represent the basic structure of the regional economy, were measured. The conclusion of the empirical implementation indicated that the change is significant. This should be crucial to the regional analyst when is called to use the extraction model.