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On the financial balance of input–output constructs: revisiting an axiomatic evaluation

Guillaume Majeau-Bettez, Richard Wood and Anders Hammer Strømman

Article (2016)

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Abstract

Financial balance is fundamental to input–output (IO) analysis, and consequently the respect of this balance is one of the dominant criteria in evaluating IO constructs. Kop Jansen, and ten Raa [(1990) The Choice of Model in the Construction of Input–Output Coefficients Matrices. International Economic Review 31, 213] proved that the byproduct-technology construct (BTC) and the industry-technology construct (ITC) do not generally conserve financial balance. In contrast, Majeau-Bettez et al. [(2016) When do Allocations and Constructs Respect Material, Energy, Financial, and Production Balances in LCA and EEIO? Journal of Industrial Ecology 20, 67–84] demonstrated that the BTC necessarily respects financial balance and that the ITC is always financially balanced when applied to data recorded in monetary units. The present article resolves this paradox.

Uncontrolled Keywords

Coproduction, Allocation, Constructs, Life-cycle assessment, Financial balance

Subjects: 1600 Industrial engineering > 1600 Industrial engineering
Department: Department of Chemical Engineering
Research Center: CIRAIG - International Reference Centre for the Life Cycle of Products, Processes and Services
Funders: Norges teknisk-naturvitenskapelige universitet, Chaire Internationale sur le Cycle de Vie
PolyPublie URL: https://publications.polymtl.ca/2444/
Journal Title: Economic Systems Research (vol. 28, no. 3)
Publisher: Taylor & Francis
DOI: 10.1080/09535314.2016.1166098
Official URL: https://doi.org/10.1080/09535314.2016.1166098
Date Deposited: 31 Jan 2017 09:54
Last Modified: 11 Apr 2024 10:22
Cite in APA 7: Majeau-Bettez, G., Wood, R., & Strømman, A. H. (2016). On the financial balance of input–output constructs: revisiting an axiomatic evaluation. Economic Systems Research, 28(3), 333-343. https://doi.org/10.1080/09535314.2016.1166098

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