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 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.

Bibliographic Details

Main Author:	World Bank
Format:	Report biblioteca
Language:	English en_US
Published:	Washington, DC 2015-08
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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