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GTAP Resource #5046

"A More Complete Characterization of Transportation Margins in the USAGE Model"
by Brown, Daniel, Katherine Harback, Shane Martin, Peter Dixon, James Lennox and Maureen Rimmer


Abstract
Because operational or performance changes in transportation industries can have an effect on economic growth and the output of other industries, a computable general equilibrium (CGE) framework is relevant for evaluating impacts of transport policy and investments. However, for the purposes of directly analyzing transportation, the transport industries and commodities are underparameterized in the standard United States Applied General Equilibrium (USAGE) model. Because the model was not initially developed for transportation policy, to perform accurate policy analysis, the transport industries require a more thorough characterization than currently exists.

This paper details an alteration of the USAGE model to accommodate these additional transport characteristics. By characterizing the tradeoffs across margins, rather than holding the ratios fixed, the impact of infrastructure investments on the broader economy can be more accurately analyzed. Transportation and shipment data sets were used to estimate the relevant elasticities and cross elasticities for the domestic trade margins in USAGE using multinomial logit models. Additionally, a multimodal truck-rail representing “container on flat car” (COFC) and “trailer on flat car” (TOFC) shipments was added to the model. The COFC-TOFC margin is an aggregation commodity made up of truck and rail inputs. Because COFC-TOFC is an increasingly important type of shipping in the United States, separating the margin for COFC-TOFC allows for a more accurate representation of the types of transport used by shippers. When the elasticity estimates are combined with the altered USAGE model that contains the COFC-TOFC margin and the ability to characterize margin tradeoffs, the impact of transportation policy is more accurately assessed than with the standard USAGE model. A simple illustration case is included.


Resource Details (Export Citation) GTAP Keywords
Category: 2016 Conference Paper
Status: Published
By/In: Presented at the 19th Annual Conference on Global Economic Analysis, Washington DC, USA
Date: 2016
Version:
Created: Harback, K. (4/15/2016)
Updated: Harback, K. (4/15/2016)
Visits: 1,361
- Trade in services
- Other data bases and data issues
- The GTAP Data Base and extensions
- North America


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