Essays on Economic Modeling: Spatial-Temporal Extensions and Verification

METRANS PhD Candidates Dissertation Presentation Seminar: "Essays on Economic Modeling: Spatial-Temporal Extensions and Verification" JiYoung ParkPhD, Urban Planning, School of Policy, Planning and Development, University of Southern California Abstract: Ever since the 2001 terrorist attacks on the U.S., several studies have evaluated the socioeconomic impacts on the U.S. economy from these and also various hypothetical attacks. Although recent studies (see for example, Planning Scenarios; Howe, 2004) illustrate preliminary estimates of the losses from various hypothetical terrorist attacks on selected major targets, such reports typically contain no spatial information. However, economic impacts from man-made or natural disasters would not be restricted to a just the immediate impact area; rather, they involve spatial incidence, spreading via social and economic linkages. Clearly, spatial impact information is important for at least two reasons in discussions of homeland security. First, political representatives have an obvious interest in their own constituency and jurisdiction. Second, sub-national impacts can cancel each other in the aggregate, causing national measures to obscure key dimensions of events. Therefore, to be useful for policy makers, impact analyses should include information on the nature of spatially distributed impacts throughout the national economy, especially for alternate defensive and mitigation measures. To estimate such spatial impacts, they should be determined by tracing impulses through inter-related industries as well as via inter-regional commodity flows. In this sense, the usefulness of interstate multiregional input-output (MRIO) type models is clear. Many mitigation and precautionary approaches to disasters are conducted at the local level, and therefore, those various hypothetical impacts cannot easily be evaluated unless sub-national effects can be estimated. It is also well known, as the various studies using IO-type models have noted, that a key limitation of IO models is that all coefficients in the models are fixed. The constant coefficients in the IO matrix ignore substitution opportunities and/or different relations between industries that might be prompted by market signals. Therefore, IO model applications are only useful for impact analyses relevant to very short periods, where we assume that most market behaviors do not change. If some of the assumptions of IO models can be relaxed so that they are relevant beyond the short-run, their usefulness and application would increase tremendously.
In the sense, this dissertation suggests new methodologies on temporal extensions. Therefore, this dissertation addresses methodologies on spatial and/or temporal economic IO models extended from the classic IO model, as well as temporally extended national IO model (USIO). Also, this dissertation includes an essay to support supply-driven IO model theoretically, which includes some problem applying to an empirical disasters due to interpretation problem. Based on spatially extended IO model at the state level, called National Interstate Economic Model (NIEMO), a supply-driven NIEMO with price elasticity of demand and temporally extended supply-driven NIEMOs (FlexNIEMOs) are introduced. Hence, this dissertation includes three essays on extension of supply-driven IO and spatial expansions from the classic demand-driven IO: 'The Supply-Driven Input-Output Model: A New Reinterpretation and Extension', 'A Two-Step Approach Estimating State-by-State Commodity Trade Flows', 'Estimation of Interstate Trade Flows for Service Industries'. Then, a fourth essay in this dissertation is 'An Evaluation of Input-Output Aggregation Error Using a New MRIO Model', which provides information on the accuracy of NIEMO. Finally, because theoretical suggestion of temporal extension is based on the demand- and supply-driven IO or NIEMO, the last essay of 'Constructing a Flexible National Interstate Economic Model (FlexNIEMO)' deals with the expansion of all types of IO models. Several papers applying those models to terrorist attacks or natural disasters are expecting to publish academically, as well as those essays.Wednesday, March 28, 2007, 12:00 noon - 1:30 pm at USC University Park Campus, Lewis Hall (RGL) Room 215** Feel free to bring your lunch. Drinks and dessert will be served. **

Location: Ralph And Goldy Lewis Hall (RGL) - 215

Audiences: Everyone Is Invited

Contact: Georgia Lum