An I-O [input-output] study of the economic structure of Appalachian Kentucky [Agriculture, problems of coal industry]

• Published in: Growth and change Vol. 12; no. 4; pp. 2 - 8
• Main Authors: Pagoulatos, A, Anschel, K.R
• Format: Journal Article
• Language: English
• Published: Oxford, UK Blackwell Publishing Ltd 01.10.1981; University of Kentucky,College of Business and Economics
• Subjects: agriculture; Coal; Coal mining; Development economics; Economic development; Economic models; Economics; Input output analysis; Regional; Structure; Kentucky; United States > US
• ISSN: 0017-4815; 1468-2257
• DOI: 10.1111/j.1468-2257.1981.tb00685.x

In this research, the impact of the increased demand for coal on the 18 coal-producing counties in Appalachian Kentucky are discussed, and the implications for dependence on a single extractive export industry are identified. An input-output model, which adapts the technical coefficients of a model developed by Miernyk, provides insight into: 1. the flow of goods and services within the regional economy, 2. the output, income, and employment effects of the existing industry, and 3. the implications of a decline in strip mining, which, if current extraction rates continue, will deplete surface coal reserves in 20 years. Two scenarios are projected for regional coal industry demand and output for the year 1990. In the first, which is based on the historical growth rate of final demand, a gross regional product of $2.5 billion in 1974 dollars is achieved, a 48% increase over 1974. The economy becomes diversified and reliance on coal decreases. In the second scenario, under the assumption of decreased reliance on strip-mined coal, coal output is 25% lower than in scenario one. Wages and salaries and final payments are also lower than in scenario one. To correct the weak linkages in the economy, public subsidy should be used to attract manufacturing.