ten Raa, Chakraborty and Small (1984) rule out industry technology based input-output coefficients in favor of a construct based on the commodity technology model. The latter, however, produces negative coefficients. This note shows that the negatives cannot be ascribed to errors of measurement. The very framework of deriving unique technical coefficients matrices from the black-box of a single pair of input and output flows must be abandoned.

This paper recovers micro cost schedules of consumers’ payment instruments from aggregate transaction costs. We assume that only two moments of the size distribution of payments matter: the number and volume of transactions. These variables explain the transaction costs of currency and debit card payments with much precision for a representative 1998 sample of Dutch retailers. The results imply that low fixed transaction costs favor currency for small transactions, while low variable transaction costs favor debit card payments for large transactions. The switch point is 30 Euros, but including the hidden costs of currency would lower it to 13 Euros.

Thijs ten Raa, Debesh Chakraborty, J. Anthony Small, An Alternative Treatment of Secondary Products in Input-Output Analysis, The Review of Economics and Statistics, Vol. 66, No. 1 (Feb., 1984), pp. 88-97