IDEAS home Printed from https://ideas.repec.org/p/wsu/wpaper/holland-4.html
   My bibliography  Save this paper

Assessing the Economic Impact of an Agricultural Export Shock on the Washington Economy: A Tale of Two Models

Author

Listed:
  • David Holland
  • Abdul Razack

    (School of Economic Sciences, Washington State University)

Abstract

The results of an economic impact analysis with a regional input-output (IO) model are compared with results from a regional computable general equilibrium CGE) model. The I0 model embodies a number of restrictive assumptions. These assumptions are consistent with the long run equilibrium of the economy where there is no capacity constraint for production, fixed coefficients in production, and no price changes or due to Leontief technology, and fixed input prices. For all of these reasons input-output results are often viewed as over estimates of regional supply response given the lack of effective regional supply constraints. In this situation, regional CGE models serve as a better alternative because of their flexibility to mimic various technology and factor market condition characteristic of real world regional economies. In this study we summarize the results of an assumed export shock on Washington economy under an input-output model and under a regional CGE model. Further, we simulate our CGE model under various factor market constraints and behaviors. We show that contrary to the conventional wisdom, the positive secondary impacts of increasing agricultural exports are usually actually larger with a regional CGE model than estimates of secondary impacts of the same shock estimated with a regional IO model.

Suggested Citation

  • David Holland & Abdul Razack, 2006. "Assessing the Economic Impact of an Agricultural Export Shock on the Washington Economy: A Tale of Two Models," Working Papers 2006-11, School of Economic Sciences, Washington State University.
  • Handle: RePEc:wsu:wpaper:holland-4
    as

    Download full text from publisher

    File URL: http://faculty.ses.wsu.edu/WorkingPapers/Holland/WorkingPaper2006-11.pdf
    File Function: First version, 2006
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David S. Kraybill & Thomas G. Johnson & David Orden, 1992. "Macroeconomic Imbalances: A Multiregional General Equilibrium Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(3), pages 726-736.
    2. Hoffman, Sandra & Robinson, Sherman & Subramanian, Shankar, 1995. "The Role of Defense Cuts in the California Recession: Computable General Equilibrium Models and Interstate Factor Mobility," CUDARE Working Papers 201475, University of California, Berkeley, Department of Agricultural and Resource Economics.
    3. Despotakis, Kostas A. & Fisher, Anthony C., 1988. "Energy in a regional economy: A computable general equilibrium model for california," Journal of Environmental Economics and Management, Elsevier, vol. 15(3), pages 313-330, September.
    4. Dan S. Rickman, 1992. "Estimating The Impacts Of Regional Business Assistance Programs: Alternative Closures In A Computable General Equilibrium Model," Papers in Regional Science, Wiley Blackwell, vol. 71(4), pages 421-435, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paul A. Lewin & Bruce A. Weber, 2020. "Distributional impacts of food assistance: How SNAP payments to the rural poor affect incomes in the urban core," Papers in Regional Science, Wiley Blackwell, vol. 99(5), pages 1281-1300, October.
    2. Lei Zhang & Henry Kinnucan & Jing Gao, 2016. "The Economic Contribution of Alabama’s Automotive Industry to Its Regional Economy," Economic Development Quarterly, , vol. 30(4), pages 295-315, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mark D. Partridge & Dan S. Rickman, 1998. "Regional Computable General Equilibrium Modeling: A Survey and Critical Appraisal," International Regional Science Review, , vol. 21(3), pages 205-248, December.
    2. Giesecke, James A. & Madden, John R., 2013. "Regional Computable General Equilibrium Modeling," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 379-475, Elsevier.
    3. G. Andrew Bernat, Jr. & Kenneth Hanson, 1995. "Regional Impacts Of Farm Programs: A Top-Down CGE Analysis," The Review of Regional Studies, Southern Regional Science Association, vol. 25(3), pages 331-350, Winter.
    4. Bilgic, Abdulbaki & King, Stephen A. & Lusby, Aaron K. & Schreiner, Dean F., 2002. "Estimates of U.S. Regional Commodity Trade Elasticities of Substitution," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 32(2), pages 1-20.
    5. Rickman, Dan S., 1995. "A bayesian analysis of the use of pooled coefficients in a structural regional economic model," International Journal of Forecasting, Elsevier, vol. 11(3), pages 477-490, September.
    6. Plassmann, Florenz, 2005. "The advantage of avoiding the Armington assumption in multi-region models," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 777-794, November.
    7. Hoffman, Sandra & Robinson, Sherman & Subramanian, Shankar, 1995. "The Role of Defense Cuts in the California Recession: Computable General Equilibrium Models and Interstate Factor Mobility," CUDARE Working Papers 201475, University of California, Berkeley, Department of Agricultural and Resource Economics.
    8. Peter G. McGregor & Eric P. McVittie & J. Kim Swales & Ya Ping Yin, 2000. "The Neoclassical Economic Base Multiplier," Journal of Regional Science, Wiley Blackwell, vol. 40(1), pages 1-31, February.
    9. Elena Lagomarsino & Karen Turner, 2017. "Is the production function Translog or CES? An empirical illustration using UK data," Working Papers 1713, University of Strathclyde Business School, Department of Economics.
    10. Lecca, Patrizio & Swales, Kim & Turner, Karen, 2011. "An investigation of issues relating to where energy should enter the production function," Economic Modelling, Elsevier, vol. 28(6), pages 2832-2841.
    11. Hodjat Ghadimi, 2008. "Energy in a Resource-based Regional Economy: A Dynamic General Equilibrium Analysis," Working Papers Working Paper 2008-02, Regional Research Institute, West Virginia University.
    12. Turner, Karen, 2009. "Negative rebound and disinvestment effects in response to an improvement in energy efficiency in the UK economy," Energy Economics, Elsevier, vol. 31(5), pages 648-666, September.
    13. Konan, Denise Eby, 2011. "Limits to growth: Tourism and regional labor migration," Economic Modelling, Elsevier, vol. 28(1), pages 473-481.
    14. Copenhagen Economics, 2008. "Reduced VAT for environmentally friendly products," Taxation Studies 0025, Directorate General Taxation and Customs Union, European Commission.
    15. Mark Partridge & Dan Rickman, 2010. "Computable General Equilibrium (CGE) Modelling for Regional Economic Development Analysis," Regional Studies, Taylor & Francis Journals, vol. 44(10), pages 1311-1328.
    16. Shields, Martin & Deller, Steven C. & Stallmann, Judith I., 2001. "Comparing The Impacts Of Retiree Versus Working-Age Families On A Small Rural Region: An Application Of The Wisconsin Economic Impact Modeling System," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 30(1), pages 1-12, April.
    17. Byers, Steven & Cutler, Harvey & Davies, Stephen P., 2004. "Estimating Costs and Benefits of Economic Growth: A CGE-Based Study of Tax Incentives in a Rapidly Growing Region," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 34(4), pages 1-20.
    18. repec:rri:wpaper:200705 is not listed on IDEAS
    19. Elena G. Irwin & Andrew M. Isserman & Maureen Kilkenny & Mark D. Partridge, 2010. "A Century of Research on Rural Development and Regional Issues," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(2), pages 522-553.
    20. Artis Kancs, 2001. "Predicting European Enlargement Impacts: A Framework of Interregional General Equilibrium," Eastern European Economics, Taylor & Francis Journals, vol. 39(5), pages 31-63, September.
    21. Karen Turner, 2008. "A Computable General Equilibrium Analysis of the Relative Price Sensitivity Required to Induce Rebound Effects in Response to an Improvement in Energy Efficiency in the UK Economy," Working Papers 0807, University of Strathclyde Business School, Department of Economics.

    More about this item

    Keywords

    The Washington CGE model; the Washington IO model; comparing estimated economic impacts with regional CGE and IO models.;
    All these keywords.

    JEL classification:

    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsu:wpaper:holland-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Danielle Engelhardt (email available below). General contact details of provider: https://edirc.repec.org/data/ecwsuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.