TransNIEMO: Economic Impact Analysis Using a Model of Consistent Interregional Economic and Highway Network Equilibria

Economic impact models that are spatially disaggregated are an important methodological tool in regional science. Aggregation to the national level obscures important details and is potentially misleading whenever positive impacts in one place cancel negative impacts in another. It is also likely that aggregated results are of limited interest to policymakers because of most politicians’ keen and logical interest in impacts on local constituencies. Inter-regional and multi-regional input-output models were first suggested over half a century ago to address these problems. In recent years, there had been considerable advancements in the regionalization of national input-output data. Yet, while the available multi-regional models depict trade between regions, the infrastructure over which the trade occurs remains mostly neglected. This is perhaps ironic in the context of inter-industry analysis. In this paper, we present applications of TransNIEMO, a model we developed to address this omission. Our group previously developed and applied the National Interstate Economic Model (NIEMO), a multi-regional input-output model that includes the 50 states and theDistrict of Columbiaas well as 47 industrial sectors. TransNIEMO adds the nation’s highway network which accommodates most of the intra- and inter-industry trade that NIEMO estimates. The new model seeks highway network and economic equilibria that are consistent.