Derivation of regional shadow prices

[Hurter and Moses, 1964] presented a solvable model combining input-output analysis and linear programming to derive regional product ’shadow’ prices. Their measure of prices is incomplete since it includes only regional variation-in transport and resource costs and not the intermediate product costs. The reason for this exclusion is obvious: product prices are needed to obtain intermediate product costs. In this note we extend the Hurter-Moses model to derive a full measure of regional shadow prices.