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A General Equilibrium Framework for Integrated Assessment of Transport and Economic Impacts

Edward N. Robson () and Vinayak V. Dixit ()
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Edward N. Robson: UNSW Australia
Vinayak V. Dixit: UNSW Australia

Networks and Spatial Economics, 2017, vol. 17, issue 3, 989-1013

Abstract: Abstract The use of separate transport and economic models in urban planning provides a limited view of economic impacts, restricts the testing of network design options and lengthens the planning process. Furthermore, the standard methodology for economic appraisal assumes partial economic equilibrium and cannot determine the distribution of impacts from the transport sector to households. Computable general equilibrium (CGE) models can capture general equilibrium effects and measure welfare at the household level, but mostly lack integration with transport models and do not represent all trip generators. This paper develops an integrated traffic assignment and spatial CGE model in nonlinear complementarity form, casted as a framework for economic appraisal of urban transport projects. The CGE submodel generates commuting, shopping and leisure trips as inputs into the transport submodel, which then assigns trips to the network according to user equilibrium. The resulting travel times then feed back into household prices and freight margins. Households and firms fully account for travel times in decisions on where to shop, how much labour to supply and where to source production inputs. Calibration and applications of the model are demonstrated for 14 regions and 2 industries across Sydney using GAMS/PATH on the NEOS server. The welfare of various network improvements is measured using equivalent variations. The model can be calibrated to external strategic transport models, and be extended to simulate additional trip generators and land-use.

Keywords: Spatial computable general equilibrium; Economic appraisal; Transport economics; Traffic assignment; User equilibrium; Complementarity problem (search for similar items in EconPapers)
Date: 2017
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