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 (Panos Panos) Anastasopoulos ) Anastasopoulos Panagiotis (
Models that link an econometric model to an Models that link an econometric model to an I- -O Model O Model : : I Dynamic/long- -term effects. term effects. � Dynamic/long � 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. �
Understanding REMI [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]
REMI Model Linkages (Excluding Economic Geography Linkages) (1) Output S tate and L ocal Governm ent Cons um ption S pending Output R eal Dis pos able Incom e Inves tm ent E xports (3) Population and (5) Market S hares (2) L abor & Capital L abor S upply Demand Dom es tic Migration International P opulation E m ploym ent Optim al Market Market S hare Capital S hare P articipation L abor L abor/ Output S tock R ate F orce R atio (4) W ages, Pric es, and Costs Com pens ation R ate Com pos ite Com p. R ate E m ploym ent Opportunity P roduction Cos ts Cons um er P rice Hous ing P rice R eal Com p. R ate Com pos ite P rices Deflator [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- -O models are integrated with O models are integrated with Fundamental elements like I 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 � Transportation � Environment � � Transportation Environment � Energy � Tourism � � Energy Tourism � Industrial Investment � Tax Analysis � � Industrial Investment Tax Analysis � Residential � Natural Disasters � � Residential Natural Disasters 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
REMI Demonstration Questions ? ? Questions Panos: : panast@purdue.edu panast@purdue.edu Panos
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