Assessing Intersectional Linkages Using Eigenvector Method Case Study of Tehran Province

The statistical data of Tehran Province shows that the ratios of output and employment of service sector to total provincial output and employment are 57 and 63 percent in 2001, respectively. The aim of this article is to quantitatively explain the structure of service –based economy of province, using Input-Output Model and intersectional linkages by Eigen Vector method. So, the main question in this research is that can the usage of Eigen vector method rather than traditional methods like Chenery-Watanabe and Rasmussen methods evaluate more precisely the importance of provincial economic sectors on the basis of intermediate viability in the production process? For this purpose, first the Input-Output Table of “Tehran Province” for 2001 was estimated by AFLQ method, and then the importance of provincial economic sectors was measured in terms of forward and backward linkages by Chenery-Watanabe, Rasmussen and Eigen vector methods. The results show that Eigen Vector Method can explain the importance of economic sectors of province on the basis of intermediate viability in the production process, in such a way that four key sectors are of dominant shares in industrial activities which their average share of demand out of total output is 45.5 percent, but ratios for 71 economic and service sectors are 76 percent and 84 percent, respectively. In general, results show that the nature of service sector in Tehran province is different from the services in modern economies. The main reason is that the service sector in Tehran is the consuming rather than producing sector.