Input-Output Analysis [IOA] (including Social Accounting Matrices [SAM])
Primary Source: Suomalainen, K., with contributions by Heijungs, R. (2006) Input-Output Analysis SWOT Analysis in Report on the SWOT analysis of concepts, methods, and models potentially supporting LCA. Eds. Schepelmann, Ritthoff & Santman (Wuppertal Institute for Climate and Energy) & Jeswani and Azapagic (University of Manchester), pp 96-102
Level of analysis: Mainly macro, can be applied to meso-level in some cases depending on the level of detail of available data and purpose of assessment.
Assessed aspects of sustainability: Economic, generally national economic relationships.
Main purpose of the assessment: To understand interdependencies of transactions between national industries/sectors in order to predict effects of a change in one industry on others.
Description of the methodology: IOA is a method that systematically quantifies the mutual interrelationships between various sectors of an economy. The method uses national statistics of intersectorial transactions to construct a detailed statistical picture of the national economy in matrix form. The interdependence among the sectors is described by a set of linear equations expressing the balances between the total input and the aggregate output of each commodity and service produced and consumed over a defined period of time. The effect of an event at any one point is transmitted to the rest of the economy step by step via the chain of transactions that link the whole system together.
Detailed Description
IOA was developed by Wassily Leontief as an effort to combine economic facts (empirical content) and theory (mathematical formulation of problems) to describe the inter-industry relationships typically within a nation or a region. A detailed statistical picture of the system could be achieved thanks to high-speed computers and accumulated large quantities of statistical data, and the IOA formulation by Leontief. IOA has passed from mere academic investigation [...]