European Regional Science Association
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European Regional Science Association
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The abstract for paper number 378:
Chris Jensen-Butler, Department of Economics, University of St. Andrews, St. Andrews,, United Kingdom, Bjarne Madsen, Institute of Local Government Studies, AKF, Copenhagen, Denmark
The Development and Application of LINE – A Sub-Regional Economic Model for Denmark
Traditionally, there has been a clear distinction between modelling at regional and at sub-regional levels. In regional models the main focus has been on markets for goods and services, whilst sub-regional or local models have focussed on such fields as labour markets, including commuting, and shopping trips and patterns. As a consequence, the geographical unit used in regional models has often been based on administrative definitions related to regional government and occasionally, labour market catchment areas. One important consequence of choice of this spatial level has been that activities such as commuting between areal units and shopping trips crossing area boundaries are limited in importance and volume and frequently are not modelled. On the other hand, local or sub-regional models, dealing with such questions as commuting and shopping, tend to regard production and employment, at least in basic sectors, as determined outside the model. In recent decades, several trends have emerged. First, labour markets and commuting distances have grown. Second, an increasing variety of products has meant that for the average firm, a growing share of its production becomes basic, in the sense that an increasingly larger share of its production is sold outside the region. These changes lie behind the development of a local economic model that integrates markets for goods and services and for factors of production and also includes activities such as commuting, shopping, tourism as well as trade in goods and services. A central principle in model construction has been to ensure flexibility both in terms of aggregation of basic analytical categories and elimination of categories of actors, permitting a wide range of problems to be addressed. The modelling approach (LINE) presented here, has been developed and applied to Danish regions. It is based upon an extended interregional SAM which means that the model is basically monetary. The smallest areal unit employed in the model is the municipality (kommune) which makes LINE a local or sub-regional model. The basic structure of LINE involves the SAM actors (activities, factors, institutions, needs and commodities) and a geographical dimension with place of production, place of residence and place of demand, making the model interregional. It incorporates both a real Keynesian circle and a cost-price circle which interact. LINE integrates the interregional input-output and the more local land use modelling approaches. In the present version links between the real circle and the cost-price circle are established, though the mathematical treatment remains relatively simple and linear. In the paper a concrete example of LINE is presented, a model designed to examine the effects of eliminating tolls for passage of the Great Belt fixed link in Denmark. Results of the use of this model in relation to the Great Belt problem are presented. Different model development strategies are examined.
Unfortunately full paper has not been submitted.