The Estimation of a System of Provincial Input-Output Tables for South Africa

Abstract

This paper applies a methodology based on a variation of the simple location quotient technique that allows a set of interregional input-output tables to be derived, one for each province of South Africa. It is argued that for the practical purposes of economic impact analysis, it is sufficient to operate an input-output framework that consists of the relevant province and the rest of the country. Location quotients and open and closed multipliers are presented for 23 production activities and 9 provinces of South Africa. The results reveal that Kwazulu-Natal and Gauteng, and to a lesser degree the Western Cape display the most integrated provincial economies. Comparisons with previous efforts suggest that the results are reasonably robust. Finally, it is argued that the proposed methodology has the potential to develop a similar framework at the sub-provincial level.