Microsoft Word 2007 ichrie conference Proceedings Final-Final 06-06-07. doc

Input-Output Modeling 
The first statement of the input-output model suggests that each sector is related to other industries in a 
defined region. This relationship can be expressed by an identity in terms of industry output in an n-sectors 
economy. Based on the flow of producing sectors and purchasing sectors in a local economy, the second statement 
of the I/O model presents the ratio of input required by industry j from regional industry i to the total output of 
industry j. The direct regional input coefficient, a
ij
, is also termed a technical coefficient and input-output coefficient 
(Leontief, 1986; Chen, 2006b). 
The matrix (I - A)
-1
is the Leontief (1986) inverse matrix. Each element in this matrix represents the direct 
and indirect requirements of regional industry i demanded to produce one unit of industry j. Summing the elements 
down the column of the matrix yields output multipliers. If a destination employs more local labor, purchases more 
local products from local manufacturers and businesses, linkages will be stronger and tourism effects will be more 
dependent on host community economic units. While the stronger linkages and higher multipliers were distributed to 
a local economy, there would be less imported products from outside of defined effect regions. On the other hand, 
selling more goods/services/facilities to non-resident visitors and purchasing fewer products from outside of a 

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