Linking Economic Model and Engineering Model: Application of Sequential Interindustry Model (SIM)

A conventional approach to model the regional economic impacts of a catastrophic disaster has been to employ the results from an engineering model, such as lifeline network model, in an economic model, for example input-output framework or computable general equilibrium model. However, due to the differences in modeling scheme between economic and engineering models, this type of data feed creates problems regarding sensitivity and dynamics of the impacts. In this paper, Sequential Interindustry Model (SIM) is used to disaggregate the process of production chronology to become more sensitive to the changes/damages of economic activities under a disaster situation. SIM is particularly useful to simulate the dynamic processes of impact propagation and of structural changes after a catastrophic disaster. In this paper, the issues and applications of SIM are discussed with numerical examples

Economic Impacts of Unscheduled Events: Sequential Interindustry Model (SIM) Approach

Regional economic models have been challenged to incorporate with structural changes in the economy. Especially, when a structural change is sudden, unpredictable, yet extensive, such as damages from a natural disaster, conventional models can hardly confront such significant changes due to their assumption of incremental changes. Sequential Interindustry Model (SIM) is an extension of the input-output framework that enables to trace the production process and the path of the impacts. SIM is particularly useful to simulate the dynamic process of impact propagation and of structural changes after a catastrophic disaster. In this paper, the issues and extensions of SIM are discussed with numerical examples

Using a Linear Regression Approach to Sequential Interindustry Model for Time-Lagged Economic Impact Analysis

The input-output (IO) model is a powerful economic tool with many extended applications. However, one of the widely criticized drawbacks is its rather lengthy time lag in data preparation, making it impossible to apply IO in high-resolution time-series analysis. The conventional IO model is thus unfortunately unsuited for time-series analysis. In this study, we present an innovative algorithm that integrates linear regression techniques into a derivative of the IO method, the Sequential Interindustry Model (SIM), to overcome the inherent shortcomings of statistical lags in conventional IO studies. The regressed relationship can thus be used to predict, in the short term, the accumulated chronological impacts induced by fluctuations in sectorial economic demands under disequilibrium conditions. A simulated calculation is presented to serve as an illustration and verification of the new method. In the future, this application can be extended beyond economic studies to broader problems of system analysis

EPSIM - An integrated sequential interindustry model for energy planning: evaluating economic, eletrical, environmental and health dimensions of new power plants

Energy is the input in which modern society depends the most for life standard maintenance besides economic and social activities, however, it is also one of the major sources of greenhouse gases (GHG) emissions, especially the electric sector, due to a world energy matrix concentrated on oil and coal resources. Hereby, impact analysis is essential for policy making focused on sustainable energy systems, once it provides ex ante evaluations for the diverse effects of new projects, being especially important in relation to large infra-structure investments as power plants. In the Brazilian case, although the current electrical matrix is primarily renewable and has low GHG intensity, the required expansion of generation capacity leads to rediscuss power plants’ alternatives and their externalities. Due to the transient and heterogeneous demand of these projects, economic, environmental, energy and social impacts must be assessed dynamically and spatially. This study proposes a social-environmental economic model, based on Regional Sequential Interindustry Model (SIM) integrated with geoprocessing data, in order to identify economic, pollution and public health impacts in state and county levels for energy planning analysis. Integrating I-O framework with electrical and dispersion models, dose-response functions and GIS data, this model aims to expand policy makers’ scope of analysis and provide an auxiliary tool to assess energy planning scenarios in Brazil. Moreover, a case study for wind power plants in Brazil is performed to illustrate its usage

EPSIM - A Social-Environmental Regional Sequential Interindustry Economic Model for Energy Planning: Evaluating the Impacts of New Power Plants in Brazil

This study proposes a social-environmental economic model, based on Regional Sequential Interindustry Model (SIM) integrated with geoprocessing data, in order to identify economic, pollution and public health impacts in state and municipality levels for energy planning analysis. Integrating I-O framework with electrical and dispersion models, dose-response functions and GIS data, this model aims to expand policy makers’ scope of analysis and provide an auxiliary tool to assess energy planning scenarios in Brazil both dynamically and spatially. Moreover, a case study for wind power plants in Brazil is performed to illustrate its usage

EPSIM - An integrated sequential interindustry model for energy planning: evaluating economic, eletrical, environmental and health dimensions of new power plants

Energy is the input in which modern society depends the most for life standard maintenance besides economic and social activities, however, it is also one of the major sources of greenhouse gases (GHG) emissions, especially the electric sector, due to a world energy matrix concentrated on oil and coal resources. Hereby, impact analysis is essential for policy making focused on sustainable energy systems, once it provides ex ante evaluations for the diverse effects of new projects, being especially important in relation to large infra-structure investments as power plants. In the Brazilian case, although the current electrical matrix is primarily renewable and has low GHG intensity, the required expansion of generation capacity leads to rediscuss power plants’ alternatives and their externalities. Due to the transient and heterogeneous demand of these projects, economic, environmental, energy and social impacts must be assessed dynamically and spatially. This study proposes a social-environmental economic model, based on Regional Sequential Interindustry Model (SIM) integrated with geoprocessing data, in order to identify economic, pollution and public health impacts in state and county levels for energy planning analysis. Integrating I-O framework with electrical and dispersion models, dose-response functions and GIS data, this model aims to expand policy makers’ scope of analysis and provide an auxiliary tool to assess energy planning scenarios in Brazil. Moreover, a case study for wind power plants in Brazil is performed to illustrate its usage

EPSIM - A Social-Environmental Regional Sequential Interindustry Economic Model for Energy Planning: Evaluating the Impacts of New Power Plants in Brazil

This study proposes a social-environmental economic model, based on Regional Sequential Interindustry Model (SIM) integrated with geoprocessing data, in order to identify economic, pollution and public health impacts in state and municipality levels for energy planning analysis. Integrating I-O framework with electrical and dispersion models, dose-response functions and GIS data, this model aims to expand policy makers’ scope of analysis and provide an auxiliary tool to assess energy planning scenarios in Brazil both dynamically and spatially. Moreover, a case study for wind power plants in Brazil is performed to illustrate its usage

Supply Constraint from Earthquakes in Japan in Input-Output Analysis

Disasters often cause exogenous flow damage (i.e., the [hypothetical] difference in economic scale with and without a disaster in a certain period) to production (“supply constraint”). However, input-output (IO) analysis (IOA) cannot usually consider it, because the Leontief quantity model (LQM) assumes that production is endogenous; the Ghosh quantity model (GQM) is considered implausible; and the Leontief price model (LPM) and the Ghosh price model (GPM) assume that quantity is fixed. This study proposes to consider a supply constraint in the LPM, introducing the price elasticity of demand. This study uses the loss of social surplus (SS) as a damage estimation because production (sales) is less informative as a damage index than profit (margin); that is, production can be any amount if without considering profit, and it does not tell exactly how much profit is lost for each supplier (upstream sector) and buyer (downstream sector). As a model application, this study examines Japan’s largest five earthquakes from 1995 to 2017 and the Great East Japan Earthquake (GEJE) in March 2011. The worst earthquake at the peak tends to increase price by 10-20% and decrease SS by 20-30%, when compared with the initial month’s prices/production. The worst damage tends to last eight months at most, accumulating 0.5-month-production damage (i.e., the sum of [hypothetical] differences in SS with and without an earthquake [for eight months] is 50% of the initial month production). Meanwhile, the GEJE in the five prefectures had cumulatively, a 25-month-production damage until the temporal recovery at the 37th month

Boolean delay equations on networks: An application to economic damage propagation

We introduce economic models based on Boolean Delay Equations: this formalism makes easier to take into account the complexity of the interactions between firms and is particularly appropriate for studying the propagation of an initial damage due to a catastrophe. Here we concentrate on simple cases, which allow to understand the effects of multiple concurrent production paths as well as the presence of stochasticity in the path time lengths or in the network structure. In absence of flexibility, the shortening of production of a single firm in an isolated network with multiple connections usually ends up by attaining a finite fraction of the firms or the whole economy, whereas the interactions with the outside allow a partial recovering of the activity, giving rise to periodic solutions with waves of damage which propagate across the structure. The damage propagation speed is strongly dependent upon the topology. The existence of multiple concurrent production paths does not necessarily imply a slowing down of the propagation, which can be as fast as the shortest path.Comment: Latex, 52 pages with 22 eps figure