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GTAP Resource #1497

"Analysing the Economic Impacts of a Plant Disease Incursion Using a Dynamic, Multi-regional General Equilibrium Approach"
by Wittwer, Glyn, Simon McKirdy and Ryan Wilson

This study uses a dynamic multi-regional computable general equilibrium model of the Australian economy (Monash MultiRegional Forecasting model or MMRF) to estimate the micro- and macroeconomic effects of a hypothetical disease outbreak, in this case, a Karnal bunt incursion of wheat in the Wheat Belt of Western Australia. For this application, we use a two-region (Western Australia and the rest of Australia) aggregation of the master database, which includes 144 sectors and 57 regions. In the sectoral dimension, we aggregate to 27 industries. In the regional dimension, the model also includes top-down detail of the statistical divisions of the state in which the outbreak occurs. As part of the dynamic approach, we update the database to 2003-04, which becomes the initial year, and compare a disease outbreak scenario to our baseline year-by-year. The extent of the incursion, the impact of the disease on plant yields, the response of buyers, the costs of eradication and the time path of the scenario contribute to outcomes at the industry, regional, state and national levels.

We also decompose the contribution of these individual direct effects to the overall impact of the disease in the year following the outbreak. This approach may provide some guidance as to areas for priority in attempting to eradicate or minimise the impacts of a disease. For example, the sales structure of an industry affects areas for priority. In the case of a Karnal bunt outbreak in export-oriented wheat, quarantine restrictions in foreign markets are the main source of economic losses to Western Australian producers. In the case of disease outbreaks in crops sold entirely as input to domestic processors, the focus of an incursion would switch to minimising yield losses.

The study also introduces a theory of dynamic regional labour adjustment in which economic events may lead to both real wage differentials and worker migration between regions.

Resource Details (Export Citation) GTAP Keywords
Category: 2005 Conference Paper
Status: Published
By/In: Presented at the 8th Annual Conference on Global Economic Analysis, Lübeck, Germany
Date: 2005
Version: 1
Created: Wittwer, G. (4/30/2004)
Updated: Wittwer, G. (4/30/2004)
Visits: 2,972
No keywords have been specified.

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