The effect of uncertainty in a fuzzy Input-Output analysis of water consumption applied to Macedonia

Abstract

This paper reconsiders the reliability of the results obtained by Hristov et al. (2012) from the input-output analysis of water consumption, by taking into account the effect of uncertainty inherent in the data. The imprecision and uncertainty is studied within a workable fuzzy environment as introduced by Beynon et al. (2005), where rank reversal is plausible. In addition, the water-intensive structure of the Macedonian economy is investigated by applying Dietzenbacher eigenvector methodology (1992). As suggested in the analysis of Hristov et al. (2012), the water-intensive structure of the economy in Macedonia is confirmed as being mainly focused on agriculture and several industrial sectors, given that rank reversal is absent. Consequently, there is a need to introduce changes in the agricultural production technology as well as the specialization of production in this region.