Large Projects in Hinterland Regions: A Dynamic Multiregional Input-Output Model for Assessing the Economic Impacts

Interregional spillovers and the expansion of capacity in hinterland sectors represent two types of economic impact associated with large capital projects in hinterland regions. The simultaneous treatment of these within an input-output (I-O) framework is the subject of this paper. A dynamic multiregional I-O (DMRIO) model is derived and applied to a scenario of oil development in Canada's Northwest Territories (NWT). A comparision of output profiles generated by the DMRIO model and a static MRIO model shows that the DMRIO formulation has merit. Specifically, in years where capacity adjustments are called for in the hinterland region, the static MRIO model is unable to capture the intraregional and interregional economic implications of this activity. In a year of particularly large-capacity shortfalls in several NWT sectors a static MRIO model underestimates the Canada-wide total impact of the project by more than one billion 1984 dollars.     

ON THE PLAUSIBILITY OF THE SUPPLY—DRIVEN INPUT-OUTPUT MODEL: A THEORETICAL BASIS FOR INPUT-COEFFICIENT CHANGE*

ABSTRACT. Oosterhaven (1988) labels the supply-driven input-output model “theoretically implausible” and criticizes the straightforward use of the model for impact studies. This comment extends and corrects some of the issues addressed by Oosterhaven. We derive the characteristics which industry production relations must possess to be consistent with the implied changes in industry inputs and outputs when supply-side input-output models are employed for impact analysis. First, it is shown that an implicit assumption is the characteristic of perfect substitutability among all inputs in each industry production function. This is the polar opposite of the Leontief assumption of zero elasticity of factor substitution among all inputs, and is very unrealistic for large changes from the initially observed solution since it implies that all inputs are non-essential in the production process and that any input can be substituted for all others simultaneously. Second, it is shown that the model may still be reasonable for approximating the effect of small changes since the implied production relation may be interpreted as a cost minimizing choice for a standard constant-returns-to-scale production function linearized around the initial solution under the assumption that relative prices are unchanged. Under this alternative interpretation, the supply-side model may be expected to provide a reasonable approximation, useful for analyzing changes in the neighborhood of the initial solution, but would appear to be inappropriate for analyzing large changes.     

Forecasting Structural Change With a Regional Econometric Input-Output Model

The sophistication of regional economic models has been demonstrated in numerous ways, most recently in the form of linking several modeling systems or in the expansion in the number of equations that can be manipulated successfully to produce impact analyses or forecasts. In this paper, an alternative perspective is employed. What do regional macro-level forecasts indicate about the process of structural change? A new methodology is illustrated that enables analysts to make forecasts of detailed structural change in the interindustry relations in an economy. Using a regional econometric input-output model developed for the Chicago metropolitan region, derived input-output tables are extracted for the period 1975–2016. These tables are then analyzed to determine the forecasted direction of structural changes for the region. The innovation illustrated here is based on a model that exploits the general equilibrium spirit of computable general equilibrium models through the adjustment of input coefficients to clear markets.     

A Biproportional Filter to Compare Technical and Allocation Coefficient Variations

In input-output analysis there are two alternate possibilities between Leontief's mechanism (fixed technical coefficients) and Ghosh's mechanism (fixed allocation coefficients). Testing the long-term consistency of these mechanisms entails comparing input-output matrices over time. This paper challenges the value of proportional filters (separate comparisons of column and row coefficients) and introduces the biproportional filter that allows simultaneous comparison of column and rows. An application is proposed using French input-output tables for 1980 and 1993. The stability of column coefficients cannot be taken for granted and, generally, for any sector, both row and column coefficients are found to change simultaneously.     

In Vindication of the Ghosh Model: A Reinterpretation as a Price Model

Ghosh's ‘supply-driven’ input-output model is a well-known alternative for Leontief's traditional ‘demand-driven’ input-output model. The Ghosh model calculates changes in gross sectoral outputs for exogenously specified changes in the sectoral inputs of primary factors. Typically, the model is interpreted so as to describe physical output changes as caused by changes in the physical inputs of primary factors. It has been convincingly argued, however, that this interpretation in terms of quantities is implausible. In the present paper it is shown that the supply-driven input-output model becomes plausible, once it is interpreted as a price model. That is, sectoral output values change due to price changes, which are caused by price changes for the primary inputs. Therefore the term Ghosh price model is adopted for the supply-driven model, whereas the demand-driven model is referred to as the Leontief quantity model. Dual to this Leontief quantity model is the standard Leontief price model. It is shown that the results obtained by the two price models are equivalent. Interpreting the supply-driven input-output model as a price model also allows for a meaningful interpretation of the inverse matrix in terms of multipliers. As the dual to the supply-driven (or Ghosh price) model the Ghosh quantity model is derived, which is equivalent to the demand-driven (or Leontief quantity) model.     

An Unsettled “Stranded Asset Debt”? Proposing a Supply-Side Counterpart to the “Climate Debt” in a Bid to Guide a Just Transition from Fossil Fuels in South Africa and Beyond

The reign of the fossil fuel empire must come to an end if the average global temperature rise is to be meaningfully capped. Accordingly, a myriad of financial and non-financial stranded assets will be generated in the process. Ample research has explored the implications for a South African fossil transition from a domestic perspective, but a lacuna persists in linking South Africa’s fossil regime to broader international finance flows, and particularly the role that actors from the “global North” should play in phasing out South African fossil fuels. This research finds that such institutions have exacerbated South Africa’s prospective stranded asset exposure, and by doing so, have accrued a Stranded Asset Debt (SAD)—as a supply-side counterpart to the demand-side climate debt, which they have also accumulated—perhaps to the tune of at least several dozens of billions of dollars. Although the Paris Agreement is flawed, it embodies language that can be leveraged to settle the SAD “bill”.     

It's time to scrap the NPT

Due to persisting demand-side factors and crumbling supply-side controls, the nuclear Non-Proliferation Treaty (NPT) will probably be unable to prevent a likely proliferation rate of one or two additional nuclear weapons states per decade into the foreseeable future. Beyond being ineffective, I argue that the NPT will make this proliferation much more dangerous. The NPT is a major cause of opaque proliferation, which is both highly destabilising and makes use of transnational smuggling networks which are much more likely than states to pass nuclear components to terrorists. However, abandoning the NPT in favour of a more realistic regime governing the possession of nuclear weapons would help put transnational nuclear smuggling networks out of business and stabilise the inevitable spread of nuclear weapons.     

MEASURING THE EFFECT OF COST VARIATION ON INDUSTRIAL OUTPUTS*

ABSTRACT. This paper introduces the household interactive variable input-output (HIVIO) model to measure the effect of cost variation on industrial outputs. The model produces a variety of cost elasticities that separate out impacts on industrial prices, imports, and outputs, with “own” and “cross” elasticity components. Like the conventional input-output multipliers, these cost elasticities can be useful parameters to evaluate the substituting behavior of firms and consumers. By using the 1980 Korean input-output transactions table, we find the wage and import price effects on industrial prices, outputs, and import demands.     

ANALYSIS OF A DYNAMIC RESIDENTIAL LOCATION CHOICE MODEL WITH TRANSACTION COSTS*

ABSTRACT. This paper incorporates transaction costs in a residential location choice model. An individual's choice is assumed to be an outcome of a two-stage process: a decision to change, or to undertake a transaction and, conditional on a change occurring, a choice of a new alternative. The dynamic choice model is aggregated to yield a Markovian model of residential location patterns. It is shown that recent contributions to dynamical urban modeling correspond to special cases of the deterministic version of this model. The Markovian model is used in a theoretical analysis of the influence of transaction costs on the properties of the stationary state. The effects of residential mobility rates and of interdependencies among individuals, caused by supply-side and density-related interactions, are also analyzed. It is shown how these dynamical factors modify the stationary state, thereby demonstrating the type of errors which may occur with static models that omit them.     

THE ROLE OF ERROR STRUCTURE IN SIMULATIONS ON REGIONAL INPUT-OUTPUT ANALYSIS*

Previous simulation experiments on regional input-output analysis have concluded that regional purchase coefficients are more important than technical coefficients in contributing to multiplier accuracy. This paper shows that the multiplicative error structure used in those experiments may have biased the results. A new error structure, combining a multiplicative and an additive component is introduced, and simulations are conducted on randomly generated models. The analysis shows that the results are sensitive to the relative magnitudes of the two error components, as well as to the closure of the model.     

MODELLING OF STRUCTURAL ACCELERATIONS AND APPLICATION TO CONTROLLER DESIGN

In this paper a method for the identification of simplified linear models for building structures is applied to the case when acceleration, rather than displacement, is measured. A frame from benchmark structural controller studies is simulated, and from the input-output data of these simulations, simplified models for the acceleration response of the frame are obtained that have far fewer degrees of freedom. One of these simplified models is used to design a controller, which is tested using an evaluation model from the benchmark controller studies and found to be effective.     

A Measure of Competitive Access to Destinations for Comparing Across Multiple Study Regions

Accessibility is now a common way to measure the benefits provided by transportation–land use systems. Despite its widespread use, few measurement options allow for the comparison of accessibility across multiple urban systems, and most do not adequately control for market competition between demand-side actors and supply-side facilities in localized markets. In this article, we develop a measure of competitive access to destinations that can be used to accurately compare accessibility between regions. This measure stems from spatial interaction modeling and accounts for competition at both the supply and demand sides of analysis, regional differences in transportation networks and travel behavior, and any imbalance between the size of the population and the number of opportunities. We use this method to compute access to employment for Canada's eight largest cities to comparatively examine inequalities in accessibility, both within and between cities, and by travel mode.     

UPPER BOUNDS ON THE SIZES OF INTERREGIONAL FEEDBACKS IN MULTIREGIONAL INPUT-OUTPUT MODELS*

ABSTRACT. Upper bounds are presented for a measure of the overall percentage error caused in a multiregional input-output model when interregional feedback effects are ignored. This error figure is thus a measure of the magnitude of interregional linkages. The upper bounds are expressed as a function of the levels of self-sufficiency in the regions in the model and of the norms of the regional technical coefficients matrices. Experimental results are presented for a variety of examples that are thought to reflect real-world situations, and it is clear that in many cases the upper bound (and hence the error) is extremely small. The implication is that single-region input-output models may be adequate for a variety of questions.     

Housing in the face of crisis: The influence of Israel's 2011 protest on housing policy

Do social protests affect government housing-related decisions? If so, in what way? To answer this question this study examines the influence of Israel's 2011 social protest on the government's housing policy, using an empirical cumulative-aggregative analysis of housing-related decisions over the past two decades. The empirical analysis is based on two generic classifications of government interventions commonly used in housing literature: first, decisions aimed at increasing the housing stock (supply-side), as opposed to policies aimed at augmenting consumers' financial capacity to obtain adequate housing (demand-side); and second, decisions that encourage homeownership as opposed to those that promote rental housing. The research findings show that the 2011 social protest definitely affected Israel's housing policy, because it prompted the government to engage in housing. However, the interventions introduced focused largely on increasing the inventory of housing units (supply-side) for homeownership and benefited mainly members of the middle class who qualify for mortgages and investors. Thus, despite the increase in government involvement in the post-protest period, Israel's housing policy has remained neoliberal, though in an advanced form of neoliberalism that combines market-oriented policies with centralized tendencies, which we call “centralized neoliberalism.” The study discusses the findings and their implications for various population groups. Given the current global affordable-housing crisis, the findings are relevant to many countries whose existing neoliberal housing policy is failing to address housing-market problems and challenges.     

HOUSEHOLD INCOME AND EXPENDITURE IN EXTENDED INPUT-OUTPUT MODELS: A COMPARATIVE THEORETICAL AND EMPIRICAL ANALYSIS*

ABSTRACT At the regional level in-migrant and indigenous workers are likely to have different income levels and consumption propensities. The effects that these differences have upon a local economy are explored within an extended input-output modeling framework. Two iterative input-output models, due to Miernyk et al. and Blackwell, are recast as systems of simultaneous equations and are shown to produce identical results. A detailed analysis is made of model structure and a method is outlined for the decomposition of income multipliers. Empirical versions of the two models, for Boulder and Cork, are reconstructed with data from the original studies and are used to make comparisons of the two local economies.     

A LONG RUN ECONOMIC EFFECT ANALYSIS OF ALTERNATIVE TRANSPORTATION FACILITY PLANS—REGIONAL AND NATIONAL

Initially we explained the main part of our model which enabled us to estimate and compare the long run and global economic effects of alternative transportation facility plans. Usually the short run effects of this kind of regional economic impact have been analyzed by input-output models, and the long run effects by econometric models. However, in this model, the input-output model and the econometric model were combined so as to enable us to analyze the global and long run economic effects. The interregional trade pattern coefficients and input coefficients change endogenously in each year in this model. It has previously been assumed that the fixedness of interregional trade pattern coefficients and input coefficients are the weakest points in applying the interregional input-output model for long run studies. In our model, on the contrary, variation of these coefficients has central importance. We then showed the results which were obtained from applying this model to a comparison of the long run economic effects of alternative bridge construction plans over the Japan Inland Sea. The results obtained from this demonstrative calculation are reasonable. Thus, we think, this model has sufficient applicability to the comparison of economic effects of alternative plans for nationwide transportation facility improvement. However, the variations of production cost differentials between regions are given exogenously in this model. To make them endogenous, agglomeration economies should be considered more precisely. In that case, the applicability and the precision of this model could be improved.     

Housing Market Dynamics Under Stochastic Growth: An Application to the Housing Market in Boulder, Colorado

Recent housing-market studies have modeled slow stock and price adjustment with some success. However, the empirical procedures used in these models break down if housing stocks or prices are driven by stochastic growth. In this paper I suggest an error-correction model for analyzing housing supply and demand under conditions of stochastic growth for a regional housing market. The model is applied to the housing market in Boulder, Colorado from 1981 through 1995—a period of rapid growth in housing values in the area. Long-run housing supply and demand are shown to be inelastic with respect to changes in the price of housing. The results indicate that developers respond more accurately to housing-market disequilibrium attributable to supply-side disturbances than to disturbances generated by changes in the demand for housing. On the other hand, price appreciation is driven primarily by demand disturbances.     

TRANSBOUNDARY INCOME AND EXPENDITURE FLOWS IN REGIONAL INPUT-OUTPUT MODELS*

ABSTRACT. Nearly all regional input-output models have been constructed without a proper accounting of inflows and outflows of personal income and personal consumption expenditures. Typically invoked is a no cross-payments assumption, analogous to the no cross-hauling assumption for commodities. We present a new accounting framework based on the classification of flows according to the location of income generation, receipt, and spending, and argue that only flows endogenous in all three respects should be part of a closed regional I-O model. We use the framework to compute the upward bias in multipliers in a typical regional I-O model. We also present several methods for estimating transboundary flows.     

房地产投资决策支持系统开发设计研究

投资决策是房地产开发的必要前提,但决策分析是一个相当复杂的过程,需对开发项目及其所处市场环境所包含的大量资料数据运用科学方法进行分析、运算和决策。而这些过程的实现必须借助于计算机信息管理和决策支持系统技术。本文在房地产投资决策支持系统实例设计开发的基础上,介绍了该决策支持系统的系统开发目标、系统功能结构和模块划分、系统数据的特点、系统运用的特点,以及系统数据管理设计、系统模型设计和系统输入输出设计等。最后根据房地产投资决策实务及相关计算机软件的发展,提出了该系统未来功能完善和版本升级的方向。