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GTAP Resource #5291

"Modeling land physically in CGE models: new insights on intensive and extensive margins"
by Zhao, Xin, Dominique van der Mensbrugghe and Wally Tyner

The constant elasticity of transformation (CET) functional form has been widely used in CGE models for handling land heterogeneity. However, the CET approach cannot provide traceable land use change results since land productivity changes due to land transformation are implicitly adjusted by shifting effective land supply so that results are “effective land” rather than physical land. In this study, we proposed a framework in which land transformation is physically modeled using the additive CET (ACET) approach while land productivity changes due to transformation are adjusted from land demand in production. We decomposed land productivity changes technical shifters using ACET. We demonstrated that implementing a same land productivity change technical shifter from either land supply side or land demand side are equivalent in non-land market equilibrium. For the purpose of this study, we build a simple CGE model and design experiments to comparing CET with ACET and to testing the sensitivity of two new margin responses including land productivity response due to transformation and the multiple cropping and unused land response. We demonstrated that the ACET approach plus the land productivity adjustments provide a promising alternative to the CET approach in modeling land supply in CGE model, despite that more careful studies are necessary for calibrating parameters for important responses.

Resource Details (Export Citation) GTAP Keywords
Category: 2017 Conference Paper
Status: Published
By/In: Presented at the 20th Annual Conference on Global Economic Analysis, West Lafayette, IN, USA
Date: 2017
Version: 1
Created: Zhao, X. (4/14/2017)
Updated: Zhao, X. (6/29/2017)
Visits: 2,360
- Calibration and parameter estimation
- Land use

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  File format GTAP Resource 5291  (2.5 MB)   Replicated: 0 time(s)
  File format GTAP Resource 5291  (1.2 MB)   Replicated: 0 time(s)

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Special Instructions
A paper and one model are attached.

The model is used to create results for experiment 3 in the paper. Major changes in the model compared with the standard GTAP model include:
(1) Nested ACET is used for land supply. Please search "land supply" or related varibles such as "qoes" to locate the ACET modifications in the model.
(2) CHF is introduced as a variable in ACET. Please search "CHF".
(3)Land productivity change decomposed based on CET is implemented from land demand side in production. Please search land demand or "afeta".
(4) A parameter named "MCAF" was introduced as a scale factor on "afeta"

Shall there be any questions, please contact the corresponding author or leave comments here. All questions, suggestions, and recommendations are very welcome.
Thank you,

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