Integrated Model of CGE and CUE Modeling for Evaluation of Urban Transport Projects

Abstract

Urban transport projects generate not only direct effects but also indirect economic effects through being reduced transport required times, such as locating change of households and firms, the creation of employment and expansion of firm products or household incomes. The CUE (Computable Urban Economic) model has been built to evaluate influences on locating change in the indirect effects. However, the CUE model is partial equilibrium focusing only on land markets, so that it cannot evaluate indirect effects on the creation of employment and the expansion of firm products or household incomes. The CGE (Computable General Equilibrium) model is another analytical model of the public policies for the CUE model, which outputs equilibrium price or quantity in all markets. However, the CGE model does not treat the region as divided spaces or areas. In this paper, we try to expand the CUE model to general equilibrium formulation that is called the integrating model of CGE and CUE modeling. We will build the new type of urban economic model instead of the CUE model focusing on only land markets, that is incorporated all market equilibrium of commodities or product factors.