Transcript Main Screen – Projects View

REMI® TranSight™:
An In-Depth Look
Regional Economic Models, Inc.
Amherst, MA
Overview of Presentation
•
•
•
•
•
TranSight
REMI Policy Insight
Travel Demand Models
Modeling Transportation Impacts
Viewing Results
Regional Economic Models, Inc.
(REMI) provides…

Policy Insight: A macroeconomic forecasting
model that shows the total economic, demographic
and fiscal effects of policy initiatives on local
regions

TranSight: A model that integrates Policy Insight
with transport planning and travel demand models
to show the total economic, demographic, and
fiscal effects of transportation infrastructure
projects
Comparison of models
TranSight
Policy Insight
Transportation
demand model
EDFS-53
Policy
variables
EDFS-53
Project and region
specific data
• Transportation “What If’s”
• General “What If’s”
• Forecasting
REMI TranSight™
First and foremost, REMI TranSight integrates REMI Policy
Insight®—the world’s leading economic and fiscal policy
analysis and simulation model—with the transport planning
and travel demand models used most often by government
and private sector planners.
REMI TranSight™
And because REMI Policy Insight® embodies the latest
research advances in economic geography, REMI
TranSight can show transportation planners and policy
makers the total economic effects of new investments in
highways, transit, and other transportation infrastructure.
REMI TranSight™
In particular, REMI TranSight can quantify the unique
contribution transportation investments make toward
creating and expanding industry clusters, some of the main
drivers in diversifying and sustaining regional economic
development.
How a REMI TranSight simulation
works
Alternative
Forecast
Control
Forecast
TranSight™ Structure
Project-Specific
Data
Transportation
Model
VMT
VHT
Construction
Operation
Finance
Industry Effects
Fuel Demand
Emissions
Safety
TranSight
Economic Results
EDFS-53
REMI Policy
Variables
Transportation Cost
Matrix
Transight™
Structure Complex
REMI TranSight Results:
Sample Results by Industry
•Sector Employment (to 3 digits)
•Relative Factor Productivity
•Intermediate Output Demand Empl
•Local Consumption Employment
•Investment Activity Employment
•Government Demand Employment
•Export Employment (Gross)
•Relative Production Cost
•Relative Composite Labor Cost
•Relative Fuel Cost
•Relative Capital Cost
•Relative Composite Input Cost
•Regional Purchase Coefficient
•Labor Intensity
•Average Annual Wage Rate
•Industrial Mix Index
•Demand, Imports, Self Supply
•Exports: Region, US, World
•Sector Output (to 3 digits)
•Value Added
•Wage & Salary Disbursements
More Results of
REMI TranSight
Aggregate Variables:
• Personal Income
• Transfer Payments
• Taxes
• Disposable Personal Income
• Price (PCE) Index
• Real Disposable Income
• GRP (by 22 final demand
categories, & by sector)
• Empl (by demand, & sector)
Age/Gender/
Cohort Variables:
• Population
• Migrants
• Natality Rate
• Survival Rate
• Labor Force
• Participation
Rate
REMI EDFS-53 Features
Applies economic theory, inter-industry links:

Includes New Economic Geography Theory

Is calibrated & estimated using regional data

Is dynamic and predicts when results will occur

Cause & effect model structure explains results

Alternative structures allow sensitivity tests

Is the leading Policy Analysis model in the U.S.
REMI EDFS-53 Structure (2002 - )
WITH ECONOMIC GEOGRAPHY LINKAGES
Output
Population & Labor
Supply
Labor & Capital Demand
Wages, Costs & Prices
Market
Shares
Integrated Modeling Approach
The REMI model integrates key aspects of several
economic modeling tools:
Model
I/O
Aspect
Inter-industry processing sector
CGE
Equilibrium tendencies in factor
and material input markets
Econometric
Estimates derived from panel data
Economic Geography
Labor and product agglomeration
New Economic Geography





Based on monopolistic competition
Increasing economies of scale for firms (decreasing
marginal costs).
Access to product varieties from different regions.
Different delivered prices in the same industry due to
transportation or other distance deterrence costs.
Cross hauling, cluster agglomeration, and labor productivity
are explained by microeconomic gains from having choice
and variety.
New EG Features
Labor Productivity Concepts



Labor Access Index
 Occupation & industry effects of selecting best workers
Composite Labor Cost
 Relative wage rate adjusted for labor access index
 Includes commuter distance cost blended into wage
rates
Occupation Codes
 Standard occupation codes (SOCs) are implemented
 Better groupings with sectors for analysis & display
New EG Features
Commodity Price Concepts

Delivered Price (wtd avg by sector at place of use)



Commodity Access Index (by sector at place of use)



Producer & consumer effects of better commodity choice
Reflects market share changes due to composite price changes
Composite Price (by sector at place of use)


Source production cost + transport cost to place of use
Production & transport costs reflect every source location
Delivered price adjusted for commodity access index
Production Cost (by sector at place of use)


Includes intermediate inputs from all sectors & locations
Local production cost captures intermediate input composite prices;
composite labor cost; and capital and fuel costs
New EG Features
Trade Flows and Market Shares

Trade Flows Treatment


Shows trade flows from each region to each other
region in the model, plus rest of US and rest of world
Domestic Market Shares Display

Shows share of local demand met by regions in model
New EG Features
Transportation Costs Matrix
There are three components of the matrix:
Commuting costs
 Accessibility costs
 Transportation costs

The three components respond to changes in the
effective distance between regions.
Multi-Regional Price and Wage Linkages
Occupational Labor
Access Productivity
Industry
Labor Access
Productivity
At market accessibility
estimated costs based on
dynamically estimated
price elasticity
Composite
Labor Costs
Delivered Prices and Costs
Based on
commuting in hours
per day at one-half
of the daily wage
Based on estimated
transportation costs
Composite and
Production Costs
Commodity
Access
Industry Labor
Access
Productivity
Occupational
Labor Access
Productivity
Composite
Labor Costs
Delivered Prices
and Costs
Commodity
Access
Composite and
Production Costs
Commodity
Access
Composite and
Production Costs
Industry
Labor Access
Productivity
Composite
Labor Costs
Delivered Prices
and Costs
Occupational
Labor Access
Productivity
Travel Demand Models
TranSight can be tailored to use outputs from a variety of commerciallyavailable or custom travel demand models. These include:
•
TranPlan
•
TP+/Cube
•
TransCAD
•
HERS-ST
•
Customized models
The selected model should be run under both a baseline scenario and an
alternative scenario that factors in the proposed transportation
improvement
Travel Demand Models
Variables from the travel demand models that are integrated
with TranSight to calculate the effects of a transportation
project include:
•
•
Vehicle miles traveled (VMTs)
Vehicle hours traveled (VHTs)
These inputs are needed for the following:
•
•
•
•
•
Each model region
Each forecast year
Road types (e.g. freeway, arterial) if available
Time-of-day (e.g., AM/PM Peak) if available
Both the baseline and alternative scenarios
View Transport Model Details
Construction and
Maintenance Costs
Overview:
 Projected annual costs incurred by government for
construction, maintenance and repair are entered by user
 Project financing can be split between federal, state, and
local government
 Work is usually contracted out to private construction
firms, which creates jobs and demand for intermediate
inputs
 Operation and maintenance costs more significant for
public transit than roads
Construction and
Maintenance Costs
The EDFS-53 connection:
•
•
Increased annual sales by the construction
industry, to reflect expenses on construction and
upkeep
Government expenditures, apportioned to
federal, state and local levels according to
financing percentages
Enter construction cost data
Emissions Costs/Benefits
Overview of theory:
• Two countervailing effects of road upgrades
•Increased miles traveled (emissions increase)
•Increased average speeds (emissions decrease)
balance depends on speed changes of pre-existing traffic relative
to percentage of new traffic
• Dose-response functions connect emissions rates to incidence of
various health maladies
• Costs of health problems include lost work days and leisure
activities, lower productivity, medical expenses
• Public transit reduces emissions via substitution away from cars
Emissions Costs/Benefits
Overview of data:
• Emissions rates (grams/mile) vary by speed for
each of five pollutants:
Carbon Monoxide
60
•Volatile Organic Compounds (VOCs)
•Nitrogen Oxides (NOx)
Emissions (grams/mile)
•Carbon Monoxide (CO)
50
40
30
20
10
0
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
70
75
Speed (miles/hour)
•Sulfur Oxides (SOx)
Volatile Organic Compounds and Nitrogen Oxides
6
**EPA’s MOBILE6 and PART5 models are
used to estimate these emissions rates.
VOC
NOx
5
Emissions (grams/mile)
•Small Particulate Matter (PM-10)
4
3
2
1
0
0
5
10
15
20
25
30
35
40
45
Speed (miles/hour)
50
55
60
65
Emissions Costs/Benefits
Overview of calculation:
Health costs (per gram of emissions) for each pollutant
derived from nationwide or local impact studies, and may
vary by year
• Change in emissions costs computed as follows:
•
ECj  ERj * CPGj * (VMTalt VMTbase )
…where:
ECj = Change in emissions cost for pollutant j ($)
ERj
= Emissions rate for pollutant j (gram/mile)
CPGj = Emissions cost per gram for pollutant j ($/gram)
VMTalt = Vehicle miles traveled under the alternative scenario
VMTbase = Vehicle miles traveled under the baseline scenario
Emissions Costs/Benefits
The EDFS-53 connection:
Non-pecuniary amenities accruing to laborers and
their dependents, which stimulates migration into or
out of the region where the transportation project is
completed, depending upon whether the benefits are
net positive or negative
Safety Costs/Benefits
Overview:
 Benefits/costs of a transportation project include the
following aspects
 The values of injuries and lives lost*
 This value may increase due to a gain in miles
traveled
 This value may decrease due to safety improvements
 Property damage**
 Delay due to automobile accidents**
 May vary by year to reflect rising medical and insurance
costs
*Value taken from U.S. DOT estimation of the value of life (currently $3 mil/life)
**Value taken from National Highway Traffic Safety Administration, The Economic Cost
of Motor Vehicle Crashes 1994; Lawrence J. Blincoe, 1996
Safety Costs/Benefits
Overview of calculation:
•
•
Accident rates (per mile) should be derived from local data
by road type, and can vary by year and time period (e.g.,
A.M. Peak) if data availability permits
Changes in safety costs computed as follows:
SCj  ARj * CPAj * (VMTalt VMTbase )
…where:
SCj = Change in safety cost for road/accident type j ($)
ARj
= Accident rate for road/accident type j (accident/mile)
CPAj = Safety cost per accident for road/accident type j ($/accident)
VMTalt = Vehicle miles traveled under the alternative scenario
VMTbase = Vehicle miles traveled under the baseline scenario
Safety Costs/Benefits
The EDFS-53 Connection:
Non-pecuniary amenities to households, which stimulates
migration into or out of the region where the transportation
project is completed, depending upon whether the benefits
are net positive or negative
Fuel Tax Changes
Overview


Change in fuel tax revenues proportional to change in
gallons consumed, which can move two ways
following a road upgrade:
1) Incremental travel demand: gallons increase
2) Higher average speeds of existing traffic: gallons
decrease
New or expanded public transit will induce substitution
away from cars; magnitude of switch will determine
tax revenue change
Fuel Tax Changes
Overview of calculation


Fuel efficiency varies by average speed, which may
increase due to transportation improvement
Changes in fuel tax revenue computed as follows:
FRi  FTi *
…where:
FR
1
* (VMTalt  VMTbase )
Avg( MPG)
= Change in fuel tax revenues for region i ($)
FTi
= Fuel tax rate for region i ($/gallon)
Avg(MPG) = Average fuel efficiency (miles/gallon)
VMTalt
= Vehicle miles traveled under the alternative scenario
VMTbase
= Vehicle miles traveled under the baseline scenario
i
Fuel Tax Changes
The EDFS-53 Connection:
The policy variable effect can be tailored to the client’s
specifications: say, a change in funds available for
government spending, or an adjustment to the model’s
fiscal balancing mechanism
Commuter Cost Savings

Includes the following aspects
 The amount of commuting cost saving for the entire
county or counties over the average work day.
• The value of commuting time is rated at half the
wage rate.
• This is adjusted for VHT changes (from the travel
demand model), and based on average commuting
time
– Source: Census for county commuting
patterns
Commuting Costs
The EDFS-53 Connection:
•
•
Commuting costs affect the effective distance in the
occupational labor access productivity equation (by
adjusting labor cost relative to the average wage rate),
which feeds into industry labor access productivity and
from there into composite wage rates
This ultimately affects both the composite cost of
production by industry and the relative wage rate in the
economic migration equation.
Transportation Cost Savings

Includes the following aspects
 The cost savings in transporting goods and
services due to increase in transportation
efficiency
 These are calculated from changes in VMT
and VHT between the alternative simulation
and baseline control
 Source: Travel demand model
Transportation Costs
The EDFS-53 Connection:
•
•
Transportation costs affect the effective distance in the
delivered price equation for each sector (relative to time
and to wage rates, or only to time if wage rates are
unchanged), which feeds into the composite input cost
equation to producers by sector and also into the
consumption equation to consumers by commodity
This ultimately affects both the composite cost of
production by industry and the consumption access index
in the economic migration equation.
Accessibility Cost Savings


Includes the following aspects
 Access to more diverse consumer goods and
services by households
 This affects economic migration by making a
region more or less attractive
 Access to broader array of intermediate inputs by
employers
Adjusted by changes in VMT and VHT between
and within regions
Accessibility Costs
The EDFS-53 Connection:
•
•
Accessibility costs affect the effective distance in the
intermediate input access index, which reflects a price
elasticity of demand (price is sensitive to distance) and
which feeds into the moving average commodity access
index.
The commodity access index feeds the composite input
cost equation and the consumer access equation, ultimately
affecting both the composite cost of production by industry
and the consumption access index in the economic
migration equation.
Choose which results to view, and options, e.g., charts, tables, etc.
Choose report options
Viewing the results, and the total economic effects:
Employment
rises…
Total and
private nonagricultural
employment
rises…
…delivered
prices fall…
…industry
production
costs fall…
…business
and consumer
access to
commodities
rises (red
line)…
…industries have
access to a larger
and more diverse
labor force…
…and Gross
Regional Product
rises.
Why REMI TranSight?

Integrating transportation with economic and fiscal simulation models requires
a sound theoretical basis.

REMI models are structurally complete, and built upon widely accepted
economic theory published in rigorously refereed academic journal articles.

Yet the economic theory behind REMI TranSight is accessible to any thoughtfu
person.
Why REMI TranSight?
REMI has been involved in transportation planning for years. Below, a few
examples (papers available upon request):

An Evolutionary New Economic Geography Model”; Wei Fan, Department of
Economics, University of Michigan, Ann Arbor; Frederick Treyz and George Treyz,
Regional Economic Models, Inc; Journal of Regional Science, Vol 40, No. 4, 2000 pp.
671-695.

“Monopolistic Competition Estimates of Interregional Trade Flows in Services”,
Frederick Treyz and Jim Bumgardner; Regional Cohesion and Competition in the Age of
Globalization, June 2000.

“Productivity and Accessibility: Bridging Project-Specific and Macroeconomic
Analyses of Transportation Investments”, Glen Weisbrod and Frederick Treyz; Journal
of Transportation And Statistics, Vol. 1, No. 3, October 1998.

“NCHRP Report 463: Economic Implications of Congestion”; Glen Weisbrod, Donald
Vary, George Treyz; Transportation Research Board – National Research Council; 2001.