BALANCING A SOCIAL ACCOUNTING MATRIX: Theory and application

Abstract

Computable general equilibrium modeling requires a consistent and coherent benchmark data set, which are generally organized in the form of a Social Accounting Matrix (SAM). These data generally come from quite diverse sources and correspond to different periods of time. As a result, they often present inconsistencies. We present a simple computer program that makes it possible to reconcile this information in order to balance a SAM. The program minimizes the changes to the base data using various optimizing techniques, including cross-entropy and least squares. The program is an attractive and easy alternative to the arbitrary and time-consuming manual and other methods generally used to balance SAMs.