Regionalized model

The regionalized ICES model considers 70 sub-national regions in the Euro-Mediterranean area: Italy (20 NUTS-2 regions), France (22 NUTS-2 regions), Spain (19 NUTS-2 regions), Portugal (5 NUTS-2 regions) and Greece (4 NUTS-1 regions).

The figure below summarizes the interlinked structure of the regionalized ICES. The trade structure now involves trade flows to other regions inside the country, to regions outside the country and to other countries.

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Figure: trade flows in the regionalized model

A two-step methodology is implemented to determine the bilateral trade flows across sub-regions within each country:

  • the so-called Simple Locations Quotients (SLQs) makes it possible to determine the regional domestic demand and aggregate demand for imports;
  • the gravitational approach is then used to obtain the bilateral trade flows across sub-national regions.

To take into account the sub-national context, some theoretical assumptions have been changed with respect to the standard version of ICES:

  • interregional trade flows are more fluid than international trade ones and this is guaranteed by using a CRESH demand function (Pant, 2007) which allows much flexibility to model geographical product substitution;
  • labour and capital can move between regions within the country and/or EU according to the different economic and policy scenarios.

Related publications:

Pérez-Blanco C.D. and Standardi G. (2019), “Farm waters run deep: a coupled positive multi-attribute utility programming and computable general equilibrium model to assess the economy-wide impacts of water buyback“, Agricultural Water Management, 213, pp 336-351.

Parrado R., Pérez-Blanco C.D., Gutiérrez-Martín C. and Standardi G. (2019). “Micro-macro feedback links of agricultural water management: insights from a coupled iterative Positive Multi-Attribute Utility Programming and Computable General Equilibrium model in a Mediterranean basin“, Journal of Hydrology, vol. 569, pp 291-309.

Bosello F. and Standardi G. (2018), “A Sub-national CGE Model for the European Mediterranean Countries“. In F. Perali and P. L. Scandizzo (eds.), The New Generation of Computable General Equilibrium Models, Springer International.

Standardi G, Cai Y and Yeh S. (2017), “Sensitivity of Modeling Results to Technological and Regional Details: The Case of Italy’s Carbon Mitigation Policy“, Energy Economics, vol. 63, pp 116-128

Pérez-Blanco, C.D., Standardi, G., Mysiak, J., Parrado, R., Gutiérrez-Martín, C. (2016), “Incremental water charging in agriculture. A case study of the Regione Emilia Romagna in Italy”, Environmental Modelling and Software, Environmental Modelling & Software 78 (2016), 202-215, http://dx.doi.org/10.1016/j.envsoft.2015.12.016

Bosello, F., Standardi G. (2015), “A Sub-national CGE model for the European Mediterranean Countries“, Research Paper CMCC, RP0274.

Eboli F., Standardi G. (2015), “Sea Level Rise in the Italian regions: a macro-economic assessment“, Research Papers CMCC, RP0251.

Carrera L., Standardi G., Bosello F., Mysiak J. (2015), “Assessing direct and indirect economic impacts of a flood event through the integration of spatial and computable general equilibrium modelling“, Environmental Modelling & Software, 63: 109-122.

Standardi G., Bosello F., Eboli F. (2014), “A Sub-national CGE Model for Italy“, FEEM Note di Lavoro 2014.004

Related projects:

GEMINA Project, 2014 Marine Strategy (National Project): preparatory phase on the Marine Strategy Framework Directive developed by ISPRA and University of Cà Foscari

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Last update on August 17, 2019