Modelling major projects: What are the factors that determine net social benefits?
AbstractEconomic impact statements are part and parcel of project proponents seeking government assistance, infrastructure, or environmental clearance. Such impact assessments are increasingly being conducted with computable general equilibrium (CGE) models. Frequently, however, CGE modellers do not report results in economic welfare terms nor give sufficient attention to the proper simulation requirements for determining net social benefits correctly. In this paper we take the example of a major mining project in the Western Australian region and model it under a variety of stylized scenarios in order to demonstrate the key determinants of an economic welfare measure, gross national disposable income (GNDI). We show that GNDI is sensitive to such factors as: terms of trade effects; profitability; public concessions and infrastructure; cost of foreign financing; and taxation of foreign-owned returns.
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Bibliographic InfoPaper provided by Victoria University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number g-185.
Date of creation: Apr 2009
Date of revision:
major projects; economic impact; regional CGE;
Find related papers by JEL classification:
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
- Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-04-25 (All new papers)
- NEP-CMP-2009-04-25 (Computational Economics)
- NEP-PPM-2009-04-25 (Project, Program & Portfolio Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- W. Jill Harrison & K.R. Pearson, 1994. "Computing Solutions for Large General Equilibrium Models Using GEMPACK," Centre of Policy Studies/IMPACT Centre Working Papers ip-64, Victoria University, Centre of Policy Studies/IMPACT Centre.
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