Sixteenth International Input-Output Conference
2-6 July, 2007, Istanbul, Turkey.
The International Input-Output Association (IIOA) and the Department of Management,
Istanbul Technical
University
Suggested Topic:
Monetary, Physical and Hybrid IO Analysis
Revealing Structures: Empirical Differences between Monetary and
Physical Input-Output Models and their Implications for
Environmental Economic Analysis
Minx, J.C.1*, Baiocchi, G.2, Hubacek, K.3, Wiedmann, T.1, and Barrett, J1.
1
Stockholm Environment Institute, University of York, York YO105DD, UK.
*
Corresponding author: Tel.: 0044-1904-434403
2
Department of Economics and Finance, University of Durham, Durham DH1 3HY, UK.
3
School of the Environment, University of Leeds, Leeds LS2 9JT, UK.
Abstract
Interest of the research community in physical input-output analysis has continuously
increased over the last decade, particularly after the path-breaking work of Stahmer (see
Stahmer et al., 1998) and Pedersen (see Pedersen, 1997). Hubacek and Giljum (2003) were
among the first to prominently apply physical input-output tables as an integral part of their
methodology and presenting it to a wider audience. This triggered a whole series of studies
(e.g. Suh, 2004; Dietzenbacher, 2005;), which have been mainly concerned with the
appropriate treatment of wastes in physical input-output models, but also their differences to
monetary ones (Weisz and Duchin, 2006).
However, the latter debate has been largely theoretical in nature and therefore unsatisfactory
from an empirical point of view. To our knowledge this paper presents the first in-depth
empirical comparison between monetary and physical input-output tables and how differences
between the two transmit in (environmental) input-output models. Only such a detailed study
of the available data will allow for an adequate specification of hybrid models with mixed
monetary-physical production structures as suggested in the literature (e.g. Dietzenbacher,
2005; Weisz and Duchin, 2006).
The input-output literature provides a large variety of methods for comparing production
structures (see Kurz et al., 1998). Beside some simple descriptive measure, we use mainly
graph-theoretical approaches such as qualitative input-output analysis or structural path
analysis for our comparison. Initial findings suggest that the German PIOT is so much
dominated by water that very few input-output applications can be envisioned, where this data
can be put to adequate use. However, once water is excluded by means of supplementary
tables, a very intuitive physical production structure can be revealed. The importance of the
issue of immaterial service outputs in secondary industries is emphasised throughout the
analysis. The paper concludes with some general suggestions how production structures in
hybrid units can be most adequately specified in the light of available monetary and physical
data and depending on the policy question under consideration.
Literature
Dietzenbacher, E., 2005, Waste Treatment in Physical Input-Output Analysis, Ecological
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Hubacek, K. and Giljum, S., 2003. Applying physical input–output analysis to estimate land
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Pedersen, O.G., 1999. Physical Input–Output Tables for Denmark. Products and Materials
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