Electricity Input–Output Analysis in Iranian Economics (Generalize Hypothetical Extraction Method)

With respect to targeting high economic growth rate and lack of financial resources, identifying key sectors and measuring inter-sectoral interactions in in the economy is becoming increasingly important. There is no doubt that the electricity sector in the economy plays a vital role in the development of other sub-sectors and it is expected that there will be a positive relationship between the growth and development of the subsectors of the economy and the electricity sector. In this paper, for the first time we have applied generalize (partial) hypothetical extraction method for studying the consequences of 20 percent shutdown in the electricity sector supply on output of other sectors and complete extraction electricity on output of economy. Also, in order to investigate the dependence between the electricity sector and other sectors of the economy, forward and backward linkage of this sector have also been analyzed. Updated domestic Input-Output Tables in 1390 with 71 sector and aggregated table in 13 sectors is the basis of calculation. The results show that extraction electricity, the economy’s total value added was decreased about 1.76 percent due to complete extraction of electricity sector. Also following partial extraction (20 percent) of electricity sector the largest decreases in value added take place in the radio, TV and Electrical devices and in residential units and compulsory social security, had the least changes in the value added that reflected low dependency of mentioned sectors on electricity sector. In addition, the measurement of forward and backward linkage of the electricity sector among energy sub-sectors shows that the electricity sector after the oil products sector plays a major role in the development of other products of the economy, in fact, considering that backward linkage is higher than forward linkage in electricity sector, investment in the electricity sector will bring more benefits to other sectors of the economy.