Demographic-economic modelling in the Wollongong statistical district

The objectives of this study are to apply a new demographic-economic input-output model to the Wollongong Statistical District and to carry out sensitivity analysis on this new demographic-economic model. The multipliers of the new demographic-economic model (considered as a static closed model) are compared with the traditional model (static semi-closed model) for the Wollongong region. The study finds that the static closed model calculates multipliers which are smaller than those calculated by the static semi-closed model. Thus, the study concludes that the demographic-economic model enhances the performance of the traditional input-output models specially in economies experiencing rapid economic and demographic changes, through calculating realistic output multipliers. The study also finds that the new demographic-economic model is more sensitive to changes or errors in the coefficients than the traditional model. Thus it is important to weigh the benefits of realistic multipliers against the cost of having a model which is more sensitive to errors.