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<br />sub-regional level differs considerably in size. In the Colorado study individual states are the <br />lowest level at which impacts are determined. For the Virgin River case study, the county is the <br />sub-regional level, the regional level being a three county region. <br /> <br />CGE models offer several advantages over 1-0 models, but the central advantage is that CGE <br />models admit factor substitution in production in response to changes in relative prices, while the <br />conventional input-output model employs a fixed proportion (Leontief) production function. The <br />usual production function employed in CGE models consists of a nested form involving either <br />Cobb-Douglass/Leontief or Constant Elasticity of Substitution (CES)/Leontief forms. The <br />intennediate inputs (outputs of the other sectors in the economy) enter the production function in <br />fixed proportions with coefficients from a regional input-output table. The primary inputs (labor <br />and capital along with land, energy, etc., if these are modeled) enter the top-le\'e1 of the <br />production function along with the composite input produced as intennediate goods. CGE <br />models are, however, much more data demanding than 1-0 models. Thus, only a single CGE <br />model was constructed for the Colorado study and none for the Virgin study. <br /> <br />The 1-0 Model Structures <br /> <br />The methodology for constructing regional 1-0 models is widely discussed in the literature.7 1-0 <br />models are a device for organizing the basic accounting relations that describe the production <br />sector ofthe economy.' The 1-0 method assumes: all sectors of the economy are tied together by <br />virtue of economic relations called "linkages." Further, the production of a good or service can be <br />described by a "recipe" with the ingredients being the outputs of the other sectors of the economy <br />as well as the primary inputs such as labor, capital, and other raw resources. <br /> <br />Defining I as the identity matrix, A the interindustry matrix, X the vector of outputs, and Y the <br /> <br />7 See Miller and Blair (1985) for a complete development of the theoretical and empirical foundations of <br />1-0 analysis. <br /> <br />14 <br />