A review of computable general equilibrium models for transport and their applications in appraisal

Robson, EN; Wijayaratna, KP; Dixit, VV

A review of computable general equilibrium models for transport and their applications in appraisal

Robson, EN Wijayaratna, KP

Dixit, VV

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Publication Type:: Journal Article
Citation:: Transportation Research Part A: Policy and Practice, 2018, 116 pp. 31 - 53
Issue Date:: 2018-10-01

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Field	Value	Language
dc.contributor.author	Robson, EN	en_US
dc.contributor.author	Wijayaratna, KP https://orcid.org/0000-0002-4604-7256	en_US
dc.contributor.author	Dixit, VV	en_US
dc.date.available	2020-10-01T19:02:55Z
dc.date.issued	2018-10-01	en_US
dc.identifier.citation	Transportation Research Part A: Policy and Practice, 2018, 116 pp. 31 - 53	en_US
dc.identifier.issn	0965-8564	en_US
dc.identifier.uri	http://hdl.handle.net/10453/133023
dc.description.abstract	© 2018 Elsevier Ltd In the transport planning process, decision makers require reliable and informative appraisals to facilitate comparisons and determine if a proposal is worthwhile to society. The cost–benefit analysis is the most common form of appraisal, where benefits are primarily measured from the change in consumer surplus in the transport market. However, these benefits will only reflect maximum social welfare if markets operate perfectly competitively and without any market failures. There may be significant uncaptured impacts, known as wider economic impacts, which agencies are beginning to incorporate in appraisals using ad-hoc methods. Computable general equilibrium (CGE) models are an increasingly popular method for assessing the economic impact of transport, including both direct and wider economic impacts, as they can determine the distribution of impacts among every market and agent in the economy by simulating the behaviour of households, firms and others from microeconomic first principles. Aside from their traditional role estimating changes in macroeconomic variables, CGE models can provide a measure of welfare that guarantees no double counting and accounts for nth order effects. This paper reviews the full range of CGE models that have been applied to transport issues and discusses their role in transport appraisal. CGE models for transport have been developed in urban, regional and environmental economics as well as other fields, and each field has applied its own theory, assumptions and practices to represent the relationships between transport and the economy relevant to the field. This paper also discusses the general role of CGE modelling in transport appraisal, as well as theoretical and practical concerns regarding CGE modelling practice.	en_US
dc.relation.ispartof	Transportation Research Part A: Policy and Practice	en_US
dc.relation.isbasedon	10.1016/j.tra.2018.06.003	en_US
dc.rights	info:eu-repo/semantics/openAccess
dc.subject.classification	Logistics & Transportation	en_US
dc.title	A review of computable general equilibrium models for transport and their applications in appraisal	en_US
dc.type	Journal Article
utslib.citation.volume	116	en_US
utslib.for	090507 Transport Engineering	en_US
utslib.for	1205 Urban and Regional Planning	en_US
utslib.for	1507 Transportation and Freight Services	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Engineering and Information Technology
pubs.organisational-group	/University of Technology Sydney/Faculty of Engineering and Information Technology/School of Civil and Environmental Engineering
utslib.copyright.status	open_access	*
pubs.publication-status	Published	en_US
pubs.volume	116	en_US

Abstract:

© 2018 Elsevier Ltd In the transport planning process, decision makers require reliable and informative appraisals to facilitate comparisons and determine if a proposal is worthwhile to society. The cost–benefit analysis is the most common form of appraisal, where benefits are primarily measured from the change in consumer surplus in the transport market. However, these benefits will only reflect maximum social welfare if markets operate perfectly competitively and without any market failures. There may be significant uncaptured impacts, known as wider economic impacts, which agencies are beginning to incorporate in appraisals using ad-hoc methods. Computable general equilibrium (CGE) models are an increasingly popular method for assessing the economic impact of transport, including both direct and wider economic impacts, as they can determine the distribution of impacts among every market and agent in the economy by simulating the behaviour of households, firms and others from microeconomic first principles. Aside from their traditional role estimating changes in macroeconomic variables, CGE models can provide a measure of welfare that guarantees no double counting and accounts for nth order effects. This paper reviews the full range of CGE models that have been applied to transport issues and discusses their role in transport appraisal. CGE models for transport have been developed in urban, regional and environmental economics as well as other fields, and each field has applied its own theory, assumptions and practices to represent the relationships between transport and the economy relevant to the field. This paper also discusses the general role of CGE modelling in transport appraisal, as well as theoretical and practical concerns regarding CGE modelling practice.

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http://hdl.handle.net/10453/133023