Modelling field operations in a computable general equilibrium model: An application to labour shortages in Bhutan

Arndt Feuerbacher and Humboldt-University of Berlin Jonas Luckmann

No 10464, EcoMod2017 from EcoMod

Abstract: The rationale of the paper is that traditional production structures in computable general equilibrium (CGE) models often have a rather crude representation of the agricultural sector, despite its complexity. The objective is to develop both a database and a CGE model that incorporates the different production stages within agriculture, i.e. field operations. The objective is to evaluate to what extent the explicit representation of field operation is superior to a defined default production structure. Modelling the technological changes within the agricultural sector by incorporating field operations within a general equilibrium model. The novel model framework is applied to simulate a stylized shock of a reduced agricultural workforce in Bhutan. A 2012 social accounting matrix (SAM) for Bhutan is extended by incorporating field operations. The SAM is the underlying database for a single country, comparative static computable general equilibrium (CGE) model. The model's production structure is extended to adequately represent the field operation information. Preliminary results have been generated with the model setup that includes the representation of field operations. The results a more closer tracing of why certain crop producing activities react stronger towards less labor. Furthermore, the different technological trade-offs are highlighted. A detailed presentation of results is available in the attached working paper.

Keywords: Bhutan; Agricultural issues; General equilibrium modeling (CGE) (search for similar items in EconPapers)
Date: 2017-07-04
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