Georgia : Assessing Economy Wide Indirect Impacts of East-West Highway Investments through CGE Modeling

The objective of this study was to assess the economy wide indirect benefits of investments in the East West highway (EWH). This study has used a computable general equilibrium (CGE) model, which simulates indirect benefits associated with the comp...

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Bibliographic Details
Main Author:	World Bank
Format:	Report
Language:	English en_US
Published:	Washington, DC 2015
Subjects:	VEHICLE OPERATING COSTS TRANSPORT SECTOR IMPERFECT SUBSTITUTES TRANSPORTATION ACCOUNTS PRODUCTION PRICE DISTORTIONS TRANSPORT COST SAVINGS PASSENGERS CIRCULAR FLOW STOCK DISPOSABLE INCOME INCOME EXPECTATIONS TRANSPORT INFRASTRUCTURE VEHICLES TRANSPORTATION COSTS REAL GDP TRANSPORTATION RESEARCH EXPORTS ELASTICITY INFRASTRUCTURE DEVELOPMENT ECONOMETRIC MODELING HIGHWAY PROJECTS WELFARE OPTIMIZATION TRAVEL SPEED EQUILIBRIUM VARIABLES TRAFFIC TAX INPUTS REAL INCOME INCOME TAX GROSS VEHICLE WEIGHT RETURNS TO SCALE AIR TRANSPORT SERVICES TRANSPORTATION INFRASTRUCTURE ECONOMIC OUTLOOK HIGHWAY INVESTMENTS SPEEDS TRAVEL COSTS VEHICLE TRANSPORT INVESTMENTS SAVINGS ROAD TECHNICAL ASSISTANCE FEASIBILITY STUDIES COSTS TELECOMMUNICATIONS ROAD NETWORK TRANSPORT EXOGENOUS VARIABLES IMPACT OF TRANSPORT CONSTANT RETURNS TO SCALE MOBILITY BASE YEAR DEMAND FOR TRANSPORT INTERNATIONAL TRANSPORT LONGER DISTANCES TRIPS WTO MODES OF TRANSPORT DOMESTIC TRANSPORT TRUE OPEN ECONOMY HIGHWAY IMPROVEMENT INCOME LEVELS VEHICLE-KILOMETERS ROAD IMPROVEMENT ELASTICITY OF SUBSTITUTION HIGHWAY IMPROVEMENT PROJECT GROSS DOMESTIC PRODUCT ROUTE SUBSIDIES GRANTS INFRASTRUCTURE TAXES INFRASTRUCTURE INVESTMENT EQUILIBRIUM ANALYSIS DEMAND FOR TRANSPORT SERVICES UNEMPLOYMENT BUS CONSUMPTION DRIVING VALUE ADDED TRAVEL TRANSPORTATION TRANSIT CAPITAL WAGES POLICIES COSTS OF TRANSPORTATION TRUCKS VEHICLE FLEET CARS VALUE COMPETITIVENESS PRODUCTION FUNCTIONS ELASTICITIES DEMAND PRICE CHANGES EXCISE TAX EXCESS DEMAND ECONOMY CONSUMERS MOTOR VEHICLES PASSENGER TRAVEL CORRIDOR INVESTMENT ROAD PROJECTS BENCHMARK RAILWAY ECONOMIC MODELS PRODUCTION FUNCTION BRIDGE TAX REVENUE ROAD USER ROADS COST OF TRANSPORTATION CAR PARTIAL EQUILIBRIUM ANALYSIS HIGHWAY TRADE AIR TRANSPORT GDP VEHICLE COST GOODS THEORY COST OF TRANSPORT GENERAL EQUILIBRIUM ANALYSIS GROWTH RATE TRANSPORTATION COST INVESTMENT VEHICLE OPERATING COST TRANSIT CORRIDOR ECONOMIC INFORMATION SUPPLY FUEL PRODUCT MARKETS LANES INVESTMENTS COST-BENEFIT ANALYSIS TOTAL OUTPUT EXCESS SUPPLY TRANSPORT COSTS BUS PASSENGERS VEHICLE OPERATING TRAVEL TIME CONSUMPTION INCREASES TRANSPORTATION SERVICES TRANSPORT POLICIES PASSENGER-TRIPS VEHICLE OCCUPANCY FUEL COST FREIGHT PRICES BENEFITS
Online Access:	http://documents.worldbank.org/curated/en/2015/09/25092360/georgia-assessing-economy-wide-indirect-impacts-east-west-highway-investments-through-cge-modeling http://hdl.handle.net/10986/22753

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Summary:	The objective of this study was to assess the economy wide indirect benefits of investments in the East West highway (EWH). This study has used a computable general equilibrium (CGE) model, which simulates indirect benefits associated with the completion of the upgraded road corridor. The transmission channel modeled is the reduction in transportation costs - reduction in vehicle operating costs, and time savings - resulting from the investments in the EWH. A CGE model is a simultaneous equation system that consists of equations representing various economic relationships for different economic agents, such as producers and households. CGE models are commonly used by countries and international financial institutions to simulate policy interventions to determine economy-wide impacts. This study involved modifying the existing social accounting matrix (SAM) and CGE model in order to carry out simulations to answer the question of economy wide impacts of the EWH investments, including impacts on real gross domestic product (GDP) growth, jobs, and trade, as well as impacts on households disaggregated by income. It aims to answer the following questions: how will the EWH lower the transportation costs for producers of goods and services?; what are the economy wide impacts of the EWH on employment, real GDP growth, trade, and household income?; and can the EWH help bridge the existing economic divide between rural and urban areas in Georgia? The study is aims to simulate quantitatively how the EWH as a large-scale infrastructure investment program can bring significant stimulus to foster economic growth and welfare in Georgia.

Georgia : Assessing Economy Wide Indirect Impacts of East-West Highway Investments through CGE Modeling

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