Applying Multilevel Models to the Input-Output Analysis

In the present study, an application of multilevel modeling approach to the input- output analysis are presented First, the regional input-output table of all provinces in Iran was extracted based on the Adjusted Flegg Location Quotient Method (AFLQ). Second differentiation in the Leontief technical coefficients and the backward and forward linkages among various activities and sectors of all provinces were examined using the 3- level and 2-level models. The results of variance analysis among the different levels reveal that activities, sectors and provinces are heterogeneous in terms of the mentioned indexes. Therefore, activities aggregation and spatial aggregation of the regional input- output tables raise errors and reduce the accuracy.