Linking CGE and specialist models: Deriving the implications of highway policy using USAGE-Hwy

Scientists/engineers create specialist partial-equilibrium models of energy, environment and transportation. We show how technical information from such models can be transferred into a CGE model. We illustrate the approach by describing the creation and application of USAGE-Hwy which combines USAGE...

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Bibliographic Details
Published in:Economic modelling 2017-11, Vol.66, p.1-18
Main Authors: Dixon, Peter B., Rimmer, Maureen T., Waschik, Robert
Format: Article
Language:English
Subjects:
CGE modelling
Highway modelling
Highway spending policy
Linked modelling
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Summary:Scientists/engineers create specialist partial-equilibrium models of energy, environment and transportation. We show how technical information from such models can be transferred into a CGE model. We illustrate the approach by describing the creation and application of USAGE-Hwy which combines USAGE, a CGE model of the U.S., with HERS, a specialist highway model. USAGE-Hwy translates micro information from HERS on the effects of highway expenditure programs into implications for GDP, employment, and the trade-off between current and future living standards. Combination models such as USAGE-Hwy bring scientific/engineering information into the economic domain, facilitating its use in policy discussions. •Scientists and engineers build detailed models in energy, environment and transport.•Results from these models can be absorbed in a CGE model.•We link a detailed highway model (HERS) for the U.S. with a CGE model (USAGE).•The combined model translates HERS highway spending data into economic implications.•We find that increased highway expenditure would have a positive welfare effect.
ISSN:0264-9993
1873-6122
DOI:10.1016/j.econmod.2017.04.022