The TIGER Model: Application of detailed passenger and freight transport in a regional CGE setting

The present paper describes the construction and first empirical application of the TIGER model (TIGER is an abbreviation of “Transport and Infrastructure General Equilibrium model for Regionsâ€). The TIGER model belongs to the group of regional CGE models, applying a mix of conventional modelling techniques used in standard computable general equilibrium models and New Economic Geography elements. The TIGER model can be used to evaluate transport policies on economic and environmental effects. Innovative features of the TIGER model are the detailed modelling of the transport sector and modelling of commuting and migration decisions. The approach of the TIGER model is to model cross-border related transport policies on a disaggregate level, with freight and passenger transport flows, allowing for different transport modes (road, water, rail), distinguishing between public and private transport, and for different transport motives. Commuting trips will be modelled in detail, by a location-attraction function, jointly determining area of residence and place of work. The TIGER model is constructed as a regional model on the NUTS-3 level for Belgium, the Netherlands, Luxemburg and a part of Germany, where regions are linked by interregional trade flows, transport trips and migration. In a similar way the model can be extended to all NUTS-3 regions in Europe. This paper will relate on the construction of the database for the model and the addition of innovative elements in the model, necessary to model transnational passenger and freight flows. The construction of the model is based on the available data in the TRANSTOOLS database. The detail offered by the TIGER model allows for a quantitative evaluation of effects of several transport policies with a transnational dimension in the Benelux and Germany. We will present results of the TIGER model based on a current project in the Benelux.

The SUSTRUS model: a CGE model on regional level for sustainability policies in Russia

The present paper describes the construction and first empirical application of the SUSTRUS model (the name of the model refers to “Sustainable Russiaâ€). This model will be the main result of the same-named EU funded project. The SUSTRUS model belongs to the group of regional CGE models, applied to analyze policies with a strong social, economic and environmental dimension. The SUSTRUS model can be used to assist policy makers in their choice of medium and long-term sustainability policies, for the implementation of the EU strategy for sustainable development in Russia as well as an efficient incorporation of the sustainability goals into the existing Russian policy tools on regional and federal levels. The SUSRUS model is constructed as a regional model on federal level, where regions are linked by interregional trade flows, a federal government level and migration. This paper will relate on the calibration of the database for the model and the addition of innovative elements in the model, necessary to model the link between the environmental, social, economic and international modules. The main data sources for the model are the public databases of Rosstat and the micro-level household data from the Russia Longitudinal Monitoring Survey (RLMS). Calibration of the model database was performed by a flexible cross-entropy minimization sub model and standard applied general equilibrium techniques. The general structure of the model will be discussed, focusing on the innovative features of the model and the link between the environmental and economic modules. The application of the model will be shown by a simulation exercise and a presentation of the main results.

Language and political power in the setting of a regional economic model: Application to Brussels

The city of Brussels has a unique position in Europe. It is not only the capital city of the European Union, it also the capital of federal state of Belgium, of its two different language communities and of the government of the Brussels region. Independent of this, the city itself is composed of 19 communes with a (by comparison in Europe) large degree of independence from the central authority. The intertwining of different public institutions and the sheer complexity of those institutions make it difficult to identify single policies performed in Brussels as well as the competences of the public actors. The present paper treats a city, much like the city of Brussels, and its border region as an urban employment center, shared by two language groups. Both groups commute to the city center and share a space in the urban labor market. We treat the locational preference of households in and around this city, taking into account the preference of each language group for public facilities in their native language. We first derive a first-best optimum for the whole city and derive the locational equilibrium of both groups. This is considered both with and without moving costs. Then we consider restrictions to the availability of public facilities for each group, dependent on political restrictions or local regional preferences. In a last section, we consider the impact of transport infrastructure, a numeric overweight of one group and elaborate more on possible impacts of migration and agglomeration effects within the city. Innovative elements in the model are the treatment of the language groups and its implementation in the urban model. The paper treats how this can be introduced in an applied model for Brussels and gives directions for future work

The TIGER Model: Application of detailed passenger and freight transport in a regional CGE setting

The present paper describes the construction and first empirical application of the TIGER model (TIGER is an abbreviation of "Transport and Infrastructure General Equilibrium model for Regions"). The TIGER model belongs to the group of regional CGE models, applying a mix of conventional modelling techniques used in standard computable general equilibrium models and New Economic Geography elements. The TIGER model can be used to evaluate transport policies on economic and environmental effects. Innovative features of the TIGER model are the detailed modelling of the transport sector and modelling of commuting and migration decisions. The approach of the TIGER model is to model cross-border related transport policies on a disaggregate level, with freight and passenger transport flows, allowing for different transport modes (road, water, rail), distinguishing between public and private transport, and for different transport motives. Commuting trips will be modelled in detail, by a location-attraction function, jointly determining area of residence and place of work. The TIGER model is constructed as a regional model on the NUTS-3 level for Belgium, the Netherlands, Luxemburg and a part of Germany, where regions are linked by interregional trade flows, transport trips and migration. In a similar way the model can be extended to all NUTS-3 regions in Europe. This paper will relate on the construction of the database for the model and the addition of innovative elements in the model, necessary to model transnational passenger and freight flows. The construction of the model is based on the available data in the TRANSTOOLS database. The detail offered by the TIGER model allows for a quantitative evaluation of effects of several transport policies with a transnational dimension in the Benelux and Germany. We will present results of the TIGER model based on a current project in the Benelux

To raise or not to raise: Impact assessment of Russia's gas price reform

One of grand challenges which are faced by Russia today is to deregulate its gas market while favouring longer-term growth of economy. Since the 1990s, several proposals for structural reforms of Russian gas industry have been intensively debated, including the split-up of Gazprom. From the mid-2000s onwards, the key component of the reforms has become the introduction of a new pricing scheme for natural gas supply at the domestic markets. This is claimed to fit in a policy promoting energy efficiency, increasing investments in natural gas production and bringing the natural gas price on the domestic market closer to long term cost recovery. Underpricing of natural gas at the domestic markets was an explicit feature of the Soviet era, aimed at stimulating industrial growth. In the post-Soviet period, domestic gas prices were kept at relatively low levels to back up economic recovery, though this strategy had become increasingly untenable by 2006 in the light of Gazprom's investment needs into new extraction fields. A number of studies supported an upward price correction as a prerequisite for any structural reforms of Russian gas industry. Price increases on domestic market have been considered as a remedy to overcome the risk of a shortage in Russian gas sector. Since then domestic gas prices have been following a steady upward trend. The average regulated gas prices for both industrial consumers and private households have more than doubled from 2006 to 2011 . Nonetheless, today Russian consumers pay one third of the gas price charged abroad.. The growing momentum for gas price liberalization in Russia is increasingly constrained by fears of potentially strong adverse impact that market-based price setting principle will have on the economy. Based on a novel multi-regional, multi-sector and multi-household computable general equilibrium (CGE) model of the Russian Federation, this paper presents a simple yet a flexible framework for evaluating gas price reform. We found that the reform is feasible at low economic cost, without greater disparities in terms of increased inequity within and between country's federal districts. Large redistributive impacts can arise from specific mechanisms to recycle revenues. In terms of global environmental credentials, gas price liberalization can bring Russia on a substantially more sustainable path. The potential to foster adoption of energy efficiency measures by exploiting the revenue-recycling effect is, however, limited

To raise or not to raise? Impact assessment of Russia’s incremental gas price reform

The growing momentum for gas price liberalization in Russia is increasingly constrained by fears of potentially strong adverse impact that market-based price setting principle will have on the economy. Based on a novel multi-regional, multi-sector and multi-household computable general equilibrium (CGE) model of the Russian Federation, this paper presents a simple yet a flexible framework for evaluating gas price reform. We found that the reform is feasible at low economic cost, without greater disparities in terms of increased inequity within and between country’s federal districts. Large redistributive impacts can arise from specific mechanisms to recycle revenues. In terms of global environmental credentials, gas price liberalization can bring Russia on a substantially more sustainable path. The potential to foster adoption of energy efficiency measures by exploiting the revenue-recycling effect is, however, limited

Implications of an increase in domestic prices of gas in Russia, an application of the regional economic model SUSTRUS

The present paper studies the effect of an upward correction of the natural gas price on the Russian domestic market. Russia has the largest gas reserves in the world and currently produces around 550 billion cubic meters of gas each year. Sixty percent of the production is sold domestically at prices below long term marginal cost, for households and for industrial producers. The pricing of natural gas is currently a hot topic in Russia, as the Russian government proposes to liberalize the regulated domestic market price and decrease subsidies for natural gas products. This is claimed to fit in a policy promoting energy efficiency, increasing investments in natural gas production and bringing the natural gas price on the domestic market closer to long term cost recovery. We will approach the issue of gas pricing through taxation of intermediate and final use of natural gas for domestic industries and consumers. Considerable attention is given to economic impacts, environmental issues and social effects of gas pricing. We compare several scenarios of differential gas pricing, simulating increases in price for industrial and private consumers at different annual growth rates, with a time horizon from 2012 until 2020. Our results are based on an application of the SUSTRUS model, a novel computable general equilibrium model, which was developed in the same-named EU funded project. The SUSTRUS model belongs to the group of regional CGE models, applied to analyze policies with a strong social, economic and environmental dimension. The model is constructed as a regional model on federal level, where regions are linked by interregional trade flows, a federal government level and migration. The main data sources for the model are the public databases of Rosstat and the micro-level household data from the Russia Longitudinal Monitoring Survey (RLMS). Calibration of the model database was performed by a flexible cross-entropy minimization sub module and standard applied general equilibrium techniques. We find that deregulating natural gas pricing can lead to a significant improvement in energy efficiency, if prices are gradually increased for both consumers and industries alike. Differences in regional energy efficiency decrease, but are still significant. We show that increasing the consumer price of gas is indeed a regressive policy, but can be compensated for by the government

The SUSTRUS model: a CGE model on regional level for sustainability policies in Russia

The present paper describes the construction and first empirical application of the SUSTRUS model (the name of the model refers to "Sustainable Russia"). This model will be the main result of the same-named EU funded project. The SUSTRUS model belongs to the group of regional CGE models, applied to analyze policies with a strong social, economic and environmental dimension. The SUSTRUS model can be used to assist policy makers in their choice of medium and long-term sustainability policies, for the implementation of the EU strategy for sustainable development in Russia as well as an efficient incorporation of the sustainability goals into the existing Russian policy tools on regional and federal levels. The SUSRUS model is constructed as a regional model on federal level, where regions are linked by interregional trade flows, a federal government level and migration. This paper will relate on the calibration of the database for the model and the addition of innovative elements in the model, necessary to model the link between the environmental, social, economic and international modules. The main data sources for the model are the public databases of Rosstat and the micro-level household data from the Russia Longitudinal Monitoring Survey (RLMS). Calibration of the model database was performed by a flexible cross-entropy minimization sub model and standard applied general equilibrium techniques. The general structure of the model will be discussed, focusing on the innovative features of the model and the link between the environmental and economic modules. The application of the model will be shown by a simulation exercise and a presentation of the main results

A Service of zbw Leibniz-Informationszentrum Wirtschaft Leibniz Information Centre for Economics Language and political power in the setting of a regional economic model: Application to Brussels Language and political power in the setting of a regional ec

Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in ABSTRACT The city of Brussels has a unique position in Europe. It is not only the capital city of the European Union, it is also the capital of federal state of Belgium, of its two different language communities and of the government of the Brussels region. Independent of this, the city itself is composed of 19 communes with a (by comparison in Europe) large degree of independence from the central authority The present paper treats a city, much like the city of Brussels, and its border region as an urban employment center, shared by two language groups. Both groups commute to the city center and share a space in the urban labor market. We treat the locational preference of households in and around this city, taking into account the preference of each language group for public facilities in their native language. We first derive a first-best optimum for the whole city and derive the locational equilibrium of both groups. Then we consider restrictions to the availability of public facilities for each group, dependent on political restrictions or local regional preferences. In a last section, we consider the impact of transport infrastructure, a numeric overweight of one group and elaborate more on possible impacts of migration and agglomeration effects within the city. Innovative elements in the model are the treatment of the language groups and its implementation in the urban model. The paper treats how this can be introduced in an applied model for Brussels and gives directions for future work

On the construction and first empirical application of the new European Model for the Assessment of Environmental, Economic and Social effects of Sustainability Policies (EDIP)

The present paper describes the construction and first empirical application of the new European Model for the Assessment of Environmental, Economic and Social effects of Sustainability Policies (EDIP). The model is constructed using the Computable General Equilibrium (CGE) framework, which takes as a basis the notion of the Walrasian equilibrium. The EDIP model is a dynamic, recursive over time, model, involving dynamics of capital accumulation and technology progress, stock and flow relationships and backward looking expectations. It includes the representation of the micro-economic behavior of the following economic agents: several types of households differentiated by 5 income quintiles, 3 degrees of urbanization and 6 family types; production sectors differentiated by 59 NACE classification categories; investment agent; federal government and external trade sector. EDIP includes detailed representation of the production technology of all major energy sectors as well as the complex substitution possibilities between different energy inputs. It also includes distinction between income classes, family types and education levels, which make the model applicable for assessment with social indicators in a quantitative way. The first version of the model has been applied to the estimation of the temporal economic, environmental and social effects of the energy taxation as described in the EU Energy Taxation Directive. The paper describes the results of this exercise in the form of welfare effects and changes in sustainability indicators and discusses the ways the EDIP model can be developed further