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Reform of Australian Urban Transport: A CGE-Microsimulation Analysis of the Effects on Income Distribution

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  • George Verikios
  • Xiao-guang Zhang

Abstract

Australian urban transport industries experienced substantial reform during the 1990s leading to significant structural change. Urban transport is typically an important expenditure item for households and structural change in these services may affect households differently depending on their position in the distribution of income and expenditure. We estimate the effects on household income groups of this structural change by applying a computable general equilibrium model incorporating microsimulation behaviour with top-down and bottom-up links. We compare estimates based on a pure microsimulation approach, a top-down approach and a hybrid top-down/bottom-up approach. We estimate small reductions in real income and small reductions in inequality; this pattern is largely replicated across regions. Our results are insensitive to the inclusion of bottom-up links; in contrast, applying a pure microsimulation approach gives accurate results at the aggregate level but underestimates the variation in effects across deciles and regions.

Suggested Citation

  • George Verikios & Xiao-guang Zhang, 2013. "Reform of Australian Urban Transport: A CGE-Microsimulation Analysis of the Effects on Income Distribution," Centre of Policy Studies/IMPACT Centre Working Papers g-239, Victoria University, Centre of Policy Studies/IMPACT Centre.
  • Handle: RePEc:cop:wpaper:g-239
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    Cited by:

    1. Courtioux, Pierre & Lignon, Vincent, 2016. "A good career or a good marriage: The returns of higher education in France," Economic Modelling, Elsevier, vol. 57(C), pages 221-237.
    2. van Ruijven, Bas J. & O’Neill, Brian C. & Chateau, Jean, 2015. "Methods for including income distribution in global CGE models for long-term climate change research," Energy Economics, Elsevier, vol. 51(C), pages 530-543.
    3. Matteo Richiardi & John Cockburn & Hélène Maisonnave & Luca Tiberti, 2016. "Editorial," International Journal of Microsimulation, International Microsimulation Association, vol. 9(1), pages 1-4.
    4. Xu, Bin & Lin, Boqiang, 2016. "Differences in regional emissions in China's transport sector: Determinants and reduction strategies," Energy, Elsevier, vol. 95(C), pages 459-470.
    5. Debowicz, Darío, 2016. "Does the microsimulation approach used in macro–micro modelling matter? An application to the distributional effects of capital outflows during Argentina's Currency Board regime," Economic Modelling, Elsevier, vol. 54(C), pages 591-599.

    More about this item

    Keywords

    computable general equilibrium; income distribution; microeconomic reform; microsimulation; urban transport;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • C69 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Other
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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