The Regional Model for Business and Employment SAM/K-LINE®

The Regional Model for Business and Employment SAM/K-LINE® is a socio-economic model developed and run by researchers at the Centre for Regional and Tourism Research.

The model combines the local social accounts SAM-K (“Social Accounting Matrices for Municipalities”) with the regional economic calculation model LINE (“Local INSectoral and Interregional Economic model”). It makes it possible to monitor and project the development for local businesses and the labour market with different time horizons, as well as calculate scenarios/projects in a consistent manner.

The detailed insight into the economic and employment effects of change gives the model’s users a stronger basis for decision making and/or the ability to document impact to decision makers.

Who uses it?

Regions, municipalities and others with a large and continuous analysis need to become subscribers of the model and thus have access to data from SAM-K as well as detailed projections. In addition, users gain access to the User Forum, partly support and guidance, but also exchange of experience with other users of the model. Twice a year, user group meetings are held (in Danish), where subscribers have the opportunity to gain in-depth knowledge of the model and also to influence the development of the model in cooperation with the model team.

CRT also makes stand-alone analyzes with data from the Regional Model for both private and public organizations.

Contact the Model Team if you would like an offer for a calculation with the model or developed a special version of the model that is tailored to a continuous need for data.

What is SAM-K?

SAM-K is a local social account and is an extended version of the regional accounts that Statistics Denmark presents for Denmark. SAM-K provides an exhaustive and flexible description of the economic and business and employment activity in the Danish municipalities, regions and labor force catchments.

SAM-K includes the following data sources when compiling regional and local social accounts:

  • Register data for employment and income for persons (Statistics Denmark)
  • National accounts for Denmark (Statistics Denmark)
  • Production for municipalities (Regional Accounts from Statistics Denmark)
  • Municipal tax rates (Statistics Denmark)
  • Tourism data:
    • Number of nights (Statistics Denmark)
    • Daily consumption (VisitDenmark)
  • Various surveys:
    • Transport habit survey (Statistics Denmark)
    • Trade survey (Statistics Denmark and AKF)
    • Private consumption survey (Statistics Denmark).

Compared to the normally available statistics for regions and municipalities, SAM-K offers several options, eg:

  • SAM-K can be tailored to the needs of each municipality and region (relevant classification of occupations, types of labor, households, goods, etc.).
  • SAM-K provides a broad geographical description of the economic activity that not only focuses on the production site, but also incorporates the angle of residence and the commodity market (eg disposable income for households or tourist income by type of accommodation).
  • SAM-K provides a broad professional description of the economic activity that not only focuses on business characteristics, but also includes information on labor, family types and goods (eg commuting, population development, tourism patterns).
  • SAM-K forms the basis for partly projections / forecasts and partly impact calculations (effects of changed framework conditions) of the local and regional economy (incl. business and labor market) with LINE.
  • SAM-K is a coherent database that can be used in all main types of reg. Ional and local analysis models.

What is LINE?

LINE is a local economic calculation model that incorporates the basic detailed economic contexts needed to establish a community account at local level, ie. in the same way as the social accounts SAM-K.

The LINE model can set up such a regional social account with municipalities as the geographical unit. By aggregation, the model can also be applied to groups of municipalities of their choice such as regions, employment regions and labor markets. With specified assumptions that the user can choose himself, the model, in conjunction with SAM-K, can calculate a new regional account based on these self-chosen assumptions.

These properties make LINE a tool for calculating the local economy – and also the national economy – consequences of external events, changed assumptions, own interventions, etc. The results of the impact calculations are reflected in changed income and employment conditions exactly as detailed as data is in SAM-K.

For example, LINE can be used to answer questions like these:

  • What will be the regional and local effects if a large company such as LEGO closes or moves parts of production abroad?
  • How is Lolland-Falster affected by a drastic change in sugar tax?
  • What is the effect of a fixed link across the Fehmarnbelt?
  • What does a 10% increase in tourism mean for Bornholm?

Projection with LINE

By incorporating a number of assumptions about trends, LINE is also a tool for projecting the local economy. By combining LINE with SAM-K, you can quantify the estimated effects of changing framework conditions and larger business closures.

LINE has previously been used to simulate short-term economic and employment effects of change, both for municipalities, regions and across the country. If one wants to assess more long-term (supply) effects of changed framework conditions, it is possible to combine SAM-K with a so-called general equilibrium model. These are special versions of LINE, which, in great detail, calculate supply and demand in different sectors and provide knowledge about which education is needed in the longer term – for example, CRT has developed special versions of LINE in the Building and Construction sector as well as the Health sector.

Are the projections accurate?

Regional and local projections will naturally be subject to uncertainty because the projection is the economy under specific specified assumptions. Thus, there is no question of a prediction of the future, but merely a calculation of the economic and employment situation under certain conditions and thus an illustration of how the development can go if the assumptions are correct.

However, projections are still an important and useful element in strengthening the decision-making basis for long-term decisions. Eg. projections will be able to give an indication of what types of education and competencies there will be a shortage/surplus in the long term, which is important in order to be able to start the right business and employment policy today.