What Is a CGE Model?
A CGE simulation generally starts with a general equilibrium situation (baseline or business-as-usual case). Then a shock is introduced (eg, tax policy or an event such as the global financial crisis) and the CGE model can create a new state of general equilibrium.
A Brief Historical Review of CGE Modelling
Due to the indirect and induced effects of tourism spending, the final increase in total value added and employment will be much higher than the initial increase in value added and employment in the tourism industry. For example, in the case of tourism expansion, an I-O model does not account for the amount of labor flowing from other industries to the tourism industry and the resulting reduction in output from other industries.
Elements of a Standard CGE Model
However, the inclusion of imperfect competition and dynamics in the CGE model increases the complexity of the model. Parameter values are assigned to the equations in the CGE model and remain unchanged during the modeling run.
Types of CGE Models
The difference between a single-country CGE model and a global CGE model lies in the scale of the model. A bottom-up CGE model combines a set of CGE models for each region (or each firm) to form a national model, so that the model can simulate and aggregate regional (or firm-level) results at the national level.
Acceptance of CGE Modelling
Since multi-occupation exists in reality, a multi-occupation CGE model generally yields more realistic results than a single labor input CGE model. A CGE model in a specific research area normally includes an area-specific extension based on a standard CGE model.
An Evaluation of CGE Modelling
Long-Run Effects of APEC Trade Liberalization: An Applied General Equilibrium Analysis. The world economy. Trade, Technology and Labor Markets in the World Economy, 1970-90: A Computable General Equilibrium Analysis. The Journal of Development Studies.
GEMPACK Versus GAMS
Since there is no standard application of equation solving techniques for a nonlinear system, the solution algorithm of a nonlinear model is based on the specifics of the model. To solve this problem, Johansen (1960) developed a method of linearization by taking the percentage change of nonlinear equations.
How to Use GEMPACK to Do a Simulation
When you click the "File" menu, a number of options appear in the drop-down pane. Now when you load the EXE file and the CMF file into the interface and then click “Run”.
How to Use GEMPACK to Construct/
When you click on this element and select "ViewHAR view" from the drop-down list, the viewHAR interface will appear. You can then click on the "Tools" menu and select "close" from the dropdown.
Suitability of a CGE Model in Tourism Analysis
These service activities are mostly labor-intensive, so tourism demand can create considerable employment opportunities in the destination region. Tourism service sectors must purchase goods and services from the manufacturing industry and other service industries. This strong inverse relationship means that tourism demand can cause large ripple effects from downstream to upstream industries.
Assessing the Impact of Tourism Demand and Tourism Policy
At the national level in the USA, the economic impacts of tourism were demonstrated by Blake et al. Blake (2000) analyzed the effects of tourism growth and the effects of tourism taxation in Spain. The results showed that a 10% increase in tourism demand would increase the welfare of the destination country by 28 billion pesetas (0.05% of GDP) in the long run.
Assessing the Impact of Mega Events on Tourism and on the Economy
The study first estimated the direct impact of the Olympics on tourism and then used the tourism effects as shocks to simulate the economic impact. Under these assumptions, they found that the Sydney Olympics produced a net consumption loss of about $2.1 billion. 2007) modeled the economic impact of the Beijing Olympics in China. The economic impact of the 2003 Rugby World Cup (RWC) on the Australian economy, commissioned by the Department of Industry, Tourism and Resources (DITR), was estimated by URS Finance and Economics (2004).
Assessing the Impact of Tourism on the Environment and Natural
2009) used a 'bottom-up' multi-regional static CGE model to estimate the effect of the Bali bombing on the Indonesian economy in the short term. The simulation results showed that a decrease in the level of security reduced the level of tourism, the price of tourism and thus the total income; however, the environmental level did not decrease. On the other hand, an increase in the level of security resulted in an increase in the level of tourism, the price of tourism and the total income of the country, but worsened the level of the environment.
Assessing the Distributional Effect of Tourism
The Impact of Tourism on a Small Town: A CGE Approach. Special Department: Tourism and Regional Science, JRAP. The Economic Impact of Tourism on the Fijian Economy: Empirical Evidence from a Computable General Equilibrium Model. 2006).Nationwide Economic and Environmental Impacts of Tourism: A Computable General Equilibrium Approach for Thailand.http://.
Information on Economic Structure and the Role of Tourism
Table 4.2 shows that the importance of goods-producing industries increased in the 1960s and 1970s, but began to decline from 1990. The decline in the relative size of goods-producing industries since 1990 differs markedly from the small relative size in the 1960s. One is that banking services accounted for half of the contribution of financial services in 2007.
Information on Tourism Resources
Between the sixteenth and early nineteenth centuries, Singapore was part of the Malaysian state of Johor. It is one of the four Asian tigers (Hong Kong, Singapore, South Korea and Taiwan). In 2006, the Singapore Information Development Authority launched a ten-year master plan, Intelligent Nation 2015, which has endeavored to establish a robust information communication infrastructure (e.g. implementation of an ultra-high-speed and island-wide broadband infrastructure by 2015).
Performance of the Tourism Sector
Singapore tourism over time; and finally we illustrate the performance of hospitality, one of the key sectors in the tourism industry. Table 4.16 reveals the contribution of the hotel and F&B in terms of room revenue, F&B revenue and total sales turnover. The growth of the F&B industry shows a similar pattern to the hotel industry with declines in 1998 and in 2001–2003.
Characteristics of Tourism Market
Note: Visitor arrivals data excludes Malaysian land arrivals Source: Singapore Tourism Board (2005). Visitor arrivals by region in 2006 are shown in Fig.4.2, which highlights the importance of different regions to Singapore's tourism industry. The different growth rates of visitor arrivals in the tourist markets have led to a change in the ranking of the top ten tourism markets outside of hours (see Table 4.18).
Information on Tourism Policies
This plan assessed all the achievements since the Tourism Product Development Plan and claimed that Singapore's tourism infrastructure was generally well developed. His strategy was to encourage members of the tourism industry in the region to break their traditional geographical boundaries and package complementary products in order to increase Singapore's attractions with local tourist destinations. Therefore, STPB coined a new tagline 'New Asia-Singapore', which according to STPB (1996, p. 5), represents 'a Singapore that is progressive and sophisticated, but still a unique expression of the Asian soul'.
How to Incorporate Tourism into a CGE Model
For example, if tourism demand for restaurant food accounts for 80% of the sector's output in the base year, 80% of wage payments as well as gross operating surplus are attributable to the tourism sector. This approach rejects the attempt to create a tourism industry from the supply side and sees the tourism industry directly from the demand side. Because of the advantage of modeling the tourism industry directly from the demand side, this approach is illustrated in this book.
Production of Goods and Services
To represent the fixed technology in production over a period of time, a Leontief function is assumed as the top level production function. For some industries that produce more than one good or service, a CET function is used to determine the output mix. The CET function is similar to the CES function, but unlike CES, there is no constraint on ρ in CET.
Investors ’ Demand
Household Utility
As can be seen, the utility in the second expression is the logarithmic form of the utility in the first. That is, Uis the household utility, Xi is the consumption of good, γi is the vital consumption (basic consumption) of good i, and βi is the marginal budget share of good i - the share of excess consumption (luxury consumption) of good i in total excess consumption. To derive the results for an average household in an economy with a total number of households of Q, we need only divide the aggregates by Q.
Tourism Demand
Source shares in flows at buyer's prices. all,g,MKT) V7PUR_CS(g) # Total shopping expenses of tourists #;. all,g,MKT) x7_cs(g) # Total real tourist shopping expenditure #;. all,g,MKT) w7_cs(g) # Total Nominal Tourism Purchase Expenditure. Source shares in flows at buyer's prices. all,g,MKT) x8_cs(g) # Total real non-shopping tourism expenditure #;. all,g,MKT) w8_cs(g) # Total Nominal non-shopping tourism expenditure. Source shares in flows at buyer's prices. all,g,MKT) V9BAS(g) # Total non-shopping expenditure of tourists #;. all,g,MKT) V9PUR(g) # Total non-shopping expenditure by tourists.
Exports and Other Final Demands
In reality, the government requires not only goods and services, but also labor and other primary factors. Xð Þð ÞGis ¼CRHð Þð ÞGis Fð Þð ÞGis ,CR¼C=CPI i¼1, ,g; s¼d,m ð5:80Þ where Xð Þð ÞGis the government's demand for resource goods. Hð Þð ÞGis the ratio of the total change in government demand to real aggregate household consumption Fð Þð ÞGis the change in change.
The Price System
According to the agreement with investment goods, there is no primary factor involved in its production, so the basic values are given by:. or in percentage change form:. For imported goods, the basic values are prices received by importers - import duties are included. According to the definition of buyer prices, they are the basic values multiplied by the strength of sales taxes (tax rate plus one).
Income, Consumption, and Investment
Household consumption is determined by household disposable income (household income minus income tax and plus social benefit transfer) and its propensity to consume. But the contribution to the Central Provident Fund (CPF) is mandatory for Singapore households under the CPF rules, so it must be excluded from the gross household income when we calculate disposable household income. As the CPF contribution is only taxed when withdrawn at retirement, we will deduct it from the gross household income before income tax is applied.
