A New Integrated Model to Evaluate Wider Economic Impacts of Transport Policies



A New Integrated Model to Evaluate Wider Economic Impacts of Transport Policies

Authors

Ozhan Yilmaz, Middle East Technical University (METU), Ebru Voyvoda, Middle East Technical University (METU)

Description

Within this study, a discrete choice theory based household residential location and transport mode choice model and a traffic equilibrium model based on Wardrop’s principles are embedded in a computable general equilibrium (CGE) model.

Abstract

This study is concerned with representing and understanding the effects of heterogeneity among different decision makers on the evaluation of alternative transport policies. Under the legacy of dominant transport appraisal approach, which mainly relies on traditional cost-benefit assessment (CBA) analyses, alternative transport policies and associated projects are evaluated in a way to take primarily aggregate information into account. Although it is practical to use these methods, working with aggregate values leaves every kind of disparity aside and individual level information is highly lost in aggregation. This means that we need better economic models going beyond the reduction of outcomes of evaluated policies to numerical aggregates and averages. In order to grasp heterogeneity among individuals, disaggregate level modelling systems, which are complex but are also capable of predicting individual level information, come to the front in the literature, although there exist some concerns on the availability and the quality of the data that are needed by these models. Utilizing disaggregated data is not recent; in fact, it is as old as census studies. Yet, besides census studies, we currently experience micro-level information integrated into various analyses, which indicates that recent models are more data intensive. Hence, one can build more comprehensive models in designing transport policies.
This study proposes a hybrid approach to grasp the heterogeneity among different agents and to endogenise interactions among different markets. Within this study, a discrete choice theory based household residential location and transport mode choice model and a traffic equilibrium model based on Wardrop’s principles are embedded in a computable general equilibrium (CGE) model representing the characteristics of a closed urban economy. Such a task requires fully integrating three different models (economic model, household location and mode choice model, traffic equilibrium model) using a single mathematical framework where equilibrium conditions of each model are formulated using GAMS platform. Thanks to the integration procedure where models are running simultaneously, equilibrium values are calculated without any iteration looking for convergence. We test the proposed integrated model using a pseudo data set of a representative urban unit with four districts Households are differentiated according to their residential location, working location, preferred commuting mode and social status. In the scenario analysis, we evaluate a set of alternative transport policies (i.e. capacity increase in private transport, public transport improvement, cordon pricing) and analyse the impacts of such policies on a set of parameters including household locational distribution, households’ demand on consumption goods and housing, and housing prices observed.

Publisher

Association for European Transport