Page 42 - Special Topic Session (STS) - Volume 2

STS452 Nobuhiro O.
This study aims to make clear the above-mentioned interrelation by using
the input-output model, which focus on the interdependency of economic
factors. The conventional input-output analysis has focused on the changes in
output brought about by industrial activities; households have been
incorporated into the model wherein they are treated as an industry within the
framework. Batey and his co-researchers, mainly Madden, have positively
contributed to the field of the extended input-output model involving
population, especially labour accounts (Batey and Madden 1981; Batey 1985;
Batey and Weeks 1987; Batey, Madden, and Weeks 1987; Batey and Madden
1988; Batey and Weeks 1989; Batey and Madden 1999a, 1999b). The
development and potential of this model were discussed by Batey and Rose
(1990); more recently, the model has been reviewed in the context of declining
regional economies (Batey 2018).
The paper consists of the following parts. First, it starts with a description
of extended models of households to its derivative model of demography—
which Batey and others focused on in their literature. Second, we developed
the input-output model for urbanisation, applying the ‘Batey–Madden model’,
and further discussion on its multipliers. Then, the empirical analysis of the
Chinese urbanisation process is conducted. Finally, it reflects on the results
and conclusions.

2. Methodology
The urbanisation is defined as the process of the movement from people
in rural areas to urban areas. Farmers are mainly devoting themselves to
agriculture production, migrate to cities to find better jobs and seek for their
better life. City dwellers transformed from farmers become an important
labour force in factories and offices, at the same time, they enjoy the modern
consumption life.
Dividing households into one in cities and the other in villages, the input-
output model for urbanisation is constructed as the application of rudimentary
Batey-Madden Model.
− −ℎ ̇ −ℎ ̇

[ − 1 0 ] [ ] = [ ]
0 1 1
where
− : Leonetief matrix
̇
ℎ : a column vector of consumption coefficients, expressed as consumption

per household, for an urban residence
ℎ : a column vector of consumption coefficients, expressed as consumption
̇

per household, for rural residence
: a row vector of urban employment-production (urban employment/gross
output ratios) functions by industrial sector

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