Bienenfeld's Approximation of Production Prices and Eigenvalue Distribution: Further Evidence from Five European Economies

Abstract

This paper tests Bienenfeld's polynomial approximation of production prices using data from ten symmetric input–output tables of five European economies. The empirical results show that the quadratic formula works extremely well and the degree of its accuracy is connected to the actual distribution of the eigenvalues of the matrices of vertically integrated technical coefficients. It then follows that the number of vertically integrated industries that shape the production price–profit rate curves is rather low.