A Comparison of Supply-Determined SAM and CGE Models

Abstract

This study analyzes the economic impacts of transferring surface water from irrigated agriculture to recreational use at the Stillwater National Wildlife Refuge in Churchill County, Nevada. The study employs two alternative regional economic models: a supply-determined social accounting matrix (SDSAM) model and a regional computable general equilibrium (CGE) model. Model results show that the SDSAM model overestimates the policy impacts on output and factor income in agricultural sectors compared to the CGE model. We contend that a regional CGE model is theoretically more appropriate than a SDSAM model for an impact analysis where productive capacity of rural sectors is reduced.