Potentials and prospects for micro–macro modelling in regional science

There has been much progress in regional science with the development and application of both multi-sectoral macro-economic models and microsimulation models of household attributes. Yet, to date, there have been few, if any, major projects to link both models within a regional economic system. The aim of this chapter is to put forward a number of benefits of model linkage. Using the case study of the Western Isles in Scotland, U.K., we show the benefits of linking both model types through investigating the impact of an injection of new jobs into the economy. By linking households to jobs, we are able to not only model the impact of new jobs on other industrial sectors through the Western Isles input–output (IO) model but also on individual households and their attributes using the Western Isles microsimulation model (MSM).