This chapter discusses the construction of a Social Accounting Matrix (SAM) for Gipuzkoa, a province in the Basque Country region of Spain. The SAM models the regional economy through accounts of production sectors, commodities, factors of production, households, and institutions. It was constructed using data from Basque input-output tables and disaggregated to delineate between rural and urban areas in Gipuzkoa based on population density. The SAM is then calibrated by adjusting model parameters to match external benchmarks and estimates GDP per capita in 2005 as 26,235 euros for Gipuzkoa.

2.  Gipuzkoa is a province of Spain and a historical
territory of the autonomous community of the
Basque Country.
 A Social Accounting Matrix (SAM) represents
flows of all economic transactions that take place
within an economy (regional or national).

3. This chapter deals with the construction
process of Guipúzcoa (Guipúzcoa is a
province of the Basque country and is
defined using the OECD refined‐
typology as Urban Open Space
SAM.This chapter focuses on issues
specific to the construction and
characteristics of the Guipúzcoa SAM.

4. • The first stage of the construction process
involved aggregating sectors and commodities
in both tables to the chosen level . Supply and
use coefficients for each sector were then
derived from the Basque tables, assuming
that :i) the commodity supply and input use of
activities in Guipúzcoa follow the same pattern
as in the Basque region ; ii) the change in
commodity mix/input requirements from 2005
(the Base year of the Guipúzcoa SAM) to 2008
(the year of the input output tables) is
insignificant

5. • The next step on the construction process
required the conversion of the tables into a bi‐
regional structure delineating between rural
and urban locations in Guipúzcoa.
The definition of rural and urban areas was based
on population density at the municipality level.
Municipalities with a population density < 500
people per square kilometre were classified as
rural. Those with 500 or more people per
square kilometre, urban municipalities.

6. Using study area specific data on agriculture‐
and inter institutional transactions, there‐
are four steps:
Step1:Disaggregation of the Agriculture sector
.
step 2:Disaggregation of the factor accounts.
step3:Disaggregation of the household accou
nts.
step4:Estimation of Inter institutional flows.‐

7. • Activity Accounts: Each production sector i
s represented in the rural and urban part of
the
SAM (even though their significance in eac
h area may be very different), resulting in 30
sectors in total.
• Commodities:The thirteen commodity acco
unts in the Guipúzcoa SAM (see Table 7.4) r
eflect closely the choice of production sect
ors. Following the structure of the Basque SA
M, two agricultural commodity types are dis
tinguished – “agriculture” and “livestock”.

8.  Factors :four factors of production are dis
tinguished in the Guipúzcoa SAM two ty
pes of labour (skilled and unskilled), capit
al and land.
 Households: Three different household gr
oups are distinguished in the
Guipúzcoa SAM: Urban households;
Rural households; and Farm households.

9.  Other Accounts:In common with all of th
e RURAL ECMOD SAMs, a single governm
ent account, single ROW account and si
ngle Investment savings account are dis‐
tinguished.

10. 7.3.1 Gross Regional Domestic Product
 Gross Regional Domestic Product (GRDP)
is the aggregate of gross value added
(GVA) of all resident producer units in the

11. The GRDP includes regional estimates on the three
major sectors including their sub-sectors namely:
• Agriculture, Fishery and Forestry
• Industry Sector
• Mining and Quarrying Manufacturing Construction
Electricity and Water
• Service Sector
• Transport, Communication and Storage Trade
Finance Ownership of Dwellings and Real Estate
Private Government Services
GDP per head in 2005 for Guipúzcoa is estimated at
26,235 euros.

12. Different production sectors in the Guipúzcoa
e
onomy is considered in relation the contributio
n
of the sector to the total value of output gene
ra
ed in the region, the number of FTE (Full Time
quivalent) employees in the sector, and the c
on
ribution the sector makes to GRDP in the regio
n.

13. Model calibration consists of changing values
of
model input parameters in an attempt to
match
field conditions within some acceptable
criteria.
Calibration task involves systematic adjustment
of model parameter estimates so that model
outputs more accurately reflect external
benchmarks

14. • Elasticities
This includes: production elasticities and household
elasticities.
• Closure rules
The choice of closure rules was selected so as to reflect
the manner in which the case study economy opera
tes which in turn reflects the size of the study area.
• Exogenous parameters for the dynamic model
The exogenous TFP growth rates were derived for the dy
namic CGE model so as to show a slowing of growth i
n the region from 2005 to 2011 and then a gradual in
crease to 2020

15. • Baseline trajectory of GRDP
The trajectories of the urban and rural areas are
very similar, after slow growth to 2011 (0.98% in
2011), GDP increases fairly gradually to 2020 w
hen the growth rate is 2.86%.
• TFP:Total Factor Productivity.It is a
measure of the efficiency of all inputs to
a production process. Increases in
FTP result usually from
technological innovations or improvements.