Regional Economic Simulation Regional Economic Simulation Models - - PowerPoint PPT Presentation

Transportation Decision Making – Principles of Project Evaluation and Programming

Impacts of Transportation on Impacts of Transportation on Economic Development Economic Development

Regional Economic Simulation Regional Economic Simulation Models Models Policy Insight Policy Insight

Panagiotis ( Panagiotis (Panos Panos) Anastasopoulos ) Anastasopoulos

Models that link an econometric model to an Models that link an econometric model to an I I-

• O Model

O Model : :

• Dynamic/long

Dynamic/long-

• term effects.

term effects.

• Suitable for estimating impacts resulting from

Suitable for estimating impacts resulting from transportation investments. transportation investments.

• Provide wide range of outputs.

Provide wide range of outputs.

• Consider population migration changes.

Consider population migration changes.

Limitations Limitations : :

• High level of complexity.

High level of complexity.

• Extensive amount of data required.

Extensive amount of data required.

• Special staff training.

Special staff training.

• High cost.

High cost.

[Source: REMI, User Guide, v. 3.1] [Source: REMI, User Guide, v. 3.1]

Understanding REMI

[Source: REMI, User Guide, v. 3.1] [Source: REMI, User Guide, v. 3.1]

Understanding REMI

REMI Model Linkages

(Excluding Economic Geography Linkages)

S tate and L

• cal Governm

ent S pending Inves tm ent

(1) Output

Output E xports Cons um ption R eal Dis pos able Incom e

(4) W ages, Pric es, and Costs

E m ploym ent Opportunity Hous ing P rice Com pens ation R ate Com pos ite Com

• p. R

ate P roduction Cos ts Com pos ite P rices R eal Com

• p. R

ate Cons um er P rice Deflator

(3) Population and L abor S upply (2) L abor & Capital Demand

Optim al Capital S tock E m ploym ent L abor/ Output R atio

(5) Market S hares

Dom es tic Market S hare International Market S hare P

• pulation

P articipation R ate Migration L abor F

• rce

[Source: REMI, User Guide, v. 3.1] [Source: REMI, User Guide, v. 3.1]

Distinguishing Features of Distinguishing Features of the REMI Model the REMI Model

Structural Structural

Incorporates a fully transparent robust economic model built on Incorporates a fully transparent robust economic model built on proven methods and theory proven methods and theory

Dynamic Dynamic

Measures economic impacts and responsive demographic and Measures economic impacts and responsive demographic and economic changes over time economic changes over time

Integrated Integrated

Fundamental elements like I Fundamental elements like I-

• O models are integrated with

O models are integrated with advanced features advanced features

Customized Customized

Each model is custom built to accurately describe each region Each model is custom built to accurately describe each region

Examples of Model Examples of Model Applications Applications

• Environment

Environment

• Tourism

Tourism

• Tax Analysis

Tax Analysis

• Natural Disasters

Natural Disasters

• Transportation

Transportation

• Energy

Energy

• Industrial Investment

Industrial Investment

• Residential

Residential Development Development

Summary of Model Summary of Model Features Features

• Includes all inter

Includes all inter-

• industry linkages

industry linkages

• Is based on Economic Theory

Is based on Economic Theory

• Includes New Economic Geography Theory

Includes New Economic Geography Theory

• Is calibrated and estimated using data for the region

Is calibrated and estimated using data for the region

• Dynamic results predict impacts on a defined timeline

Dynamic results predict impacts on a defined timeline

• Leading forecasting and policy analysis model

Leading forecasting and policy analysis model

Questions Questions ? ?

Panos Panos: : panast@purdue.edu panast@purdue.edu

REMI Demonstration