The Research And Application Of Regional Econometric-model Combining With Shift-share Model

Econometrics is the integration of economics, statistics and mathematics. It can explain economic phenomenon by using the method of mathematics, and it is useful in the applications such as economic planning, policy-making. After its introduction to China, Econometrics model has been given more and more attention through economists to governors because its prediction and planning utility. Beside Econometrics model, there is another useful method to analyze regional economy which is called Shift-share method (SSM), it decompose the growth of j-th sector in region j, comparing with the benchmark area, into industrial mix component P_ij and competitive component D_ij to analyze regional economy structure.In this paper, by combining the theories and methods of Econometrics model and Shift-share model, we present a extension of Econometrics model for Chinese practical situation to make our regional economic research more reasonable and effective. There are two way to combine them together, the first method is choose a time-series based Shift-share method and use the P_ij and D_ij values as the explain variable to link with econometric. After the mix-model has been established we get a more clear understanding of region j's industrial structure and make a prediction through the controllable and governable variable P_ij and D_ij. The second method is establish the Econometrics model of region j and its benchmark area, then figure out prediction values of them respectively and use Shift-share method to analyze the industrial structure of region j in the future.In practical analysis sector, a specialized Econometrics-SSM model for Luzhou city has been established, in this model, Sichuan province on which Luzhou city is located has been chosen as the benchmark area. We use the Shift-share method to analyze the basic situation of each industrial sector in Luzhou city, then we make more profound analysis to these sectors and make some suggestions by using the Econometrics models. Finally, we use the Econometrics-SSM model to predict the economic production of Luzhou city of the future, the result shows that the Econometrics model combing with Shift-share model is effective and pretty precise, this method do give us some useful information to regional economic analysis.