Process / pipelineInter-industry price analysis

Leontief Price Model

The Leontief price model is the cost-side dual of the quantity input-output system: instead of asking how much each sector must produce to meet final demand, it asks what unit price each sector must charge to cover its intermediate-input costs plus its primary-input (value-added) payments. Solving the dual equation p' = p'A + v' gives p' = v'(I − A)^{-1}, so the same Leontief inverse that propagates quantities also propagates costs, making the model the standard tool for tracing how a change in wages, taxes, or imported-input prices pushes through the entire price structure.

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Leontief Price Model

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Vyanzo

Miller, R. E., & Blair, P. D. (2009). Input-Output Analysis: Foundations and Extensions (2nd ed.). Cambridge University Press. ISBN: 9780521739023
Leontief, W. W. (1936). Quantitative input and output relations in the economic system of the United States. The Review of Economics and Statistics, 18(3), 105–125. DOI: 10.2307/1927837 ↗

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ScholarGate. (2026, June 22). Leontief Cost-Push Price Model (Dual Input-Output Model). ScholarGate. https://scholargate.app/sw/economics/leontief-price-model

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