Measuring the Economic Impact of Agricultural Policies in Metro and Non-Metro Regions in Washington: A Regional General Equilibrium Approach

Abstract

WA regional CGE model for the state of Washington was used to examine the economic impacts from increasing export demand in different agricultural industries and manufacturing. We developed a procedure to modify a state level IMPLAN based CGE model to include 4 household groups designated by geographic location (metro or non-metro) and type of household (farm or non-farm). We also disaggregated the single labor category from IMPLAN into 6 distinct labor groups comprised of like-skill occupations. Our grouping of households by geography and type verifies that economic impacts from agricultural export shocks, are not evenly distributed. Our results demonstrate that wages paid by the agriculture industry tend to benefit farm households more, and non-metro farm households the most. Welfare effects are also greatest for farm households in terms of equivalent variation. However, even metro non-farm households also receive positive welfare change through spillover effects in the form of increased returns to labor and capital captured by these households.agricultural exports, equivalent variation, welfare changes on metro and nonmetro households