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International Regional Science Review
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A Hybrid Top-Down, Bottom-Up Regional Computable General Equilibrium Model

Peter J. Higgs

IMPACT Project Research Center, University of Melbourne, Victoria 3053 Australia

B. R. Parmenter

Institute of Applied Economic and Social Research, University of Melbourne, Victoria 3052 Australia

Russell J. Rimmer

Department of Information and Numerical Sciences, Victoria College, Victoria 3168 Australia

This article compares top-down and bottom-up methods for obtaining regional projections for policy analysis using computable general equilibrium models. In view of the computing and data problems of bottom-up, multisectoral models, a hybrid approach is proposed in which a partially regionalized computable general equilibrium model is used to drive a top-down regional equation system. The hybrid avoids some of the serious theoretical shortcomings of the top-down approach but is much less data demanding than a complete bottom-up model. An application, based on the ORANI computable general equilibrium model of Australia, is presented with comparative top-down and hybrid results.

International Regional Science Review, Vol. 11, No. 3, 317-328 (1988)
DOI: 10.1177/016001768801100308
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M. D. Partridge and D. S. Rickman
Regional Computable General Equilibrium Modeling: A Survey and Critical Appraisal
International Regional Science Review, December 1, 1998; 21(3): 205 - 248.
[Abstract] [PDF]