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rec10 - 18-7 A socialaccounting matrix is a tablethat...

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18-7. A social accounting matrix is a tablethat shows the flows from each sector in an economy to each other sector. Here is sirnple five-sector example, with blank entries indicating flows known to be zero: I,AB P1- YZ I,AB H1 H2 P1 P2 15 3 130 80 ? ,) 15 130 20 25 40 55 total 220 i 190 105 If the matrix were estimated perfectly, it would be balanced: each row sum (the flow out of a sec- tot) would equal the corresponding column sum (the flow in). As a practical matter, however, there are several difficulties: - Some entries, marked ? above, have no reliable estimates. - In the estimated table, the row sums do not necessarilyequal the column surns. - We have sepdate estimates of the total flows into (or out of) each sector, shown to the right of the rows in our table. These do not necessarily equal the sums of the estimated rows or columns. illonlinear prograrnming can be used to adjust this matrix by finding the balanced matrix that is closest, in some sense, to the one given.
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