Virginia umemployment analysis



Introduction

The economic situation differs from country to country, caused by difference in population, geography, monetary system, political situation and a lot of other factors. But even within one country there are always a number of regions that differ from one another by their economic performance. This situation is especially true for big countries like US. If the regions are too broadly defined, the economic diversity would be lost. If the regions are too narrowly defined, they are not likely to have any viability as economic entities, and this circumstance will increase the problem of developing good regional economic data pertinent to the individual regions.
Economic indicators like income, employment and population may differ in the rural and urban areas of a single region, but the growth of the region still depends on the economic performance of the region as a whole, and especially the towns and cities.

An input-output model is very useful of measuring regional economic activity. Such a model effectively determines the impact of one economic variable on another can be used to analyze expected growth. The measure of regional economic indicators and comparing them to national could produce a good estimate of economic performance of a region.
The regional economic model in case of the region within US could be compared with the model of a small country. And national model could be seen as an aggregation of many interrelated regional models.

This paper includes an estimation of the regional economic model The model is an attempt to estimate possible relationship within economic indicators. This paper also presents an analysis of regional economic indicators and national economic indicators in order to compare economic performance of the region and national economy as a whole.
This model use annual national and state level data to produce regional estimates of income, employment, wages, population, labor force and the unemployment rate as a economic indicators for Virginia state as a region.

Previous studies

Regional scientists have long attempted to develop meaningful definitions and measures of economic diversity and diversification, and to establish functional relationships between diversity, diversification, and economic performance. The Regional economic models where (were) created to answer questions like "What is the relationship between a region\'s changing economic structure and performance”.
Recent econometric models of regions were stressing macroeconomic relationship as a main idea of structuring of the model. A Number of models have been constructed for states and even smaller areas in order to find an effective forecasting tool linking the regional economic forecasting to the national economic forecast. Regional models were constructed as satellites to national models. Economic base theory views regional economic growth as being driven by exogenous final demands, notably exports. Input-output models are extensions of the economic base model, whereby intersectional economic relationships are explicitly considered Because of the underlying assumption that the regional economy is driven by exogenous final demands.
The idea of regional economic model that is (instead of "that is" say "used") in this paper is based on two studies that present economic models of regions in US. One study, reports on a regional economic modeling approach used by East Kentucky Power Cooperative, Inc. (EKPC), a rural electric cooperative that serves 280,000 residential customers and 15,000 commercial customers in east-central Kentucky. These models use quarterly, county-level data to produce regional forecasts of income, employment, wages, population, labor force and the unemployment rate (1). Another study describes an economic model for state of Mississippi (2). Both studies indicated economic variables in regional output, labor, and income and wages blocks and estimated regressions on order(must be "in order") to fine (must be "to find") direction of dependence among variables. Both studies provide graphical interpretation of their models.

Data

Regional models often use data, which is allocated to the region, state or national level on the basis of employment, income or some other variable actually measured at the regional level. Such data may serve the needs of particular model specifications and produce forecasts of variables.
In this study, Virginia regional model uses a variety of national and regional data. The variables are summarized in (Appendix A). All variables were taken from University of Virginia Social Science Data Center (8).
Gross domestic product (GDP), the featured measure of U.S. output, is the market value of the goods and services produced by