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Article

Interpreting Social Accounting Matrix (SAM) as an Information Channel

1
Graphics and Imaging Laboratory, University of Girona, 17003 Girona, Spain
2
Research Institute of Innovative Technology for the Earth, Kyoto 6190292, Japan
3
Department of Economics, American University, Washington, DC 20016, USA
4
Sante Fe Institute, Albuquerque, NM 87501, USA
*
Author to whom correspondence should be addressed.
Entropy 2020, 22(12), 1346; https://doi.org/10.3390/e22121346
Received: 25 October 2020 / Revised: 20 November 2020 / Accepted: 24 November 2020 / Published: 28 November 2020
(This article belongs to the Special Issue Entropy: The Scientific Tool of the 21st Century)
Information theory, and the concept of information channel, allows us to calculate the mutual information between the source (input) and the receiver (output), both represented by probability distributions over their possible states. In this paper, we use the theory behind the information channel to provide an enhanced interpretation to a Social Accounting Matrix (SAM), a square matrix whose columns and rows present the expenditure and receipt accounts of economic actors. Under our interpretation, the SAM’s coefficients, which, conceptually, can be viewed as a Markov chain, can be interpreted as an information channel, allowing us to optimize the desired level of aggregation within the SAM. In addition, the developed information measures can describe accurately the evolution of a SAM over time. Interpreting the SAM matrix as an ergodic chain could show the effect of a shock on the economy after several periods or economic cycles. Under our new framework, finding the power limit of the matrix allows one to check (and confirm) whether the matrix is well-constructed (irreducible and aperiodic), and obtain new optimization functions to balance the SAM matrix. In addition to the theory, we also provide two empirical examples that support our channel concept and help to understand the associated measures. View Full-Text
Keywords: social accounting matrix; entropy; mutual information; information channel; markov chain social accounting matrix; entropy; mutual information; information channel; markov chain
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MDPI and ACS Style

Sbert, M.; Chen, S.; Feixas, M.; Vila, M.; Golan, A. Interpreting Social Accounting Matrix (SAM) as an Information Channel. Entropy 2020, 22, 1346. https://doi.org/10.3390/e22121346

AMA Style

Sbert M, Chen S, Feixas M, Vila M, Golan A. Interpreting Social Accounting Matrix (SAM) as an Information Channel. Entropy. 2020; 22(12):1346. https://doi.org/10.3390/e22121346

Chicago/Turabian Style

Sbert, Mateu, Shuning Chen, Miquel Feixas, Marius Vila, and Amos Golan. 2020. "Interpreting Social Accounting Matrix (SAM) as an Information Channel" Entropy 22, no. 12: 1346. https://doi.org/10.3390/e22121346

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