Resource Center

Advanced Search
Technical Papers
Working Papers
Research Memoranda
GTAP-L Mailing List
GTAP FAQs
Educational Materials
CGE Books/Articles
Important References
Submit New Resource

GTAP Resources: Resource Display

GTAP Resource #942

"A New Regional Household Demand System for GTAP"
by McDougall, Robert


Abstract
The GTAP model, versions 4.1 and lower, suffers from some defects in the implementation of the regional household demand system. Most seriously, the upper level of the demand system assumes that each regional household faces a fixed price for utility from private consumption. But with a private consumption demand system of the CDE form, the price of utility from private consumption depends on the level of private consumption expenditure. With no fixed price for utility from private consumption, the familiar Cobb-Douglas demand system does not apply. Accordingly, the upper-level demand equations are in error.

Furthermore, utility and equivalent variation are wrongly computed in simulations with non-standard settings for the CDE expansion parameters. Even with the standard settings, in multi-step simulations the utility and equivalent variation computations are inexact. The welfare decomposition inherits the defects of the equivalent variation computation.

In removing these defects we revise in passing some minor misfeatures of the old treatment: Firstly, we treat the entire final demand system as the demand system of a representative household, rather than a conglomeration of representative and region-wide demand systems (subsection 2.6). Secondly, we provide a new facility for shifting the allocation of regional income exogenously by modifying rather than overriding the final demand system (subsection 2.14). Finally, we eliminate an uninterpretable \nuisance term" from the decomposition of equivalent variation (subsection 4.3).



Resource Details (Export Citation) GTAP Keywords
Category: Technical Paper
Status: Published
By/In: GTAP Technical Paper No. 20
Date: 2002
Cite Avg: 7 (based on Google Scholar "Cited by" number)
Version:
Created: Bacou, M. (3/7/2002)
Updated: Batta, G. (10/16/2006)
Visits: 6,441
- Software
- Calibration and parameter estimation


Attachments
If you have trouble accessing any of the attachments below due to disability, please contact the authors listed above.


Public Access
  File format accompanying software, revision 1   (86.5 KB)   Replicated: 0 time(s)
  File format GTAP Resource 942   (343.2 KB)   Replicated: 0 time(s)


Restricted Access
No documents have been attached.


Special Instructions
On the accompanying software, see Appendix C of the paper.






Comments (0 posted)
You must log in before entering comments.

No comments have been posted.