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In-Depth Information
weightings in calculating per person treatment costs for our case categories. We
assumed that one in nine fatalities will first be hospitalized, based on the pattern of
the Graniteville chlorine incident (Van Sickle et al.
2009
). Patients who die are
assumed to have incurred “high risk” hospitalization costs in line with Molinari
et al.
Based on 182 fatalities and 1,144 injuries, we estimate the resource loss
associated with the dead and the injured using the method outlined in Giesecke
et al. (
2012
). This generates $9.5 million (m.) of lost labor inputs, comprising
$1.9 m. from injuries and $7.6 m. from fatalities.
16.3
LA-DYN: A Dynamic CGE Model of the LA-County Economy
16.3.1 Overview of the Structure of LA-DYN
LA-DYN is a dynamic CGE model of the LA-County economy.
3
The model's
theoretical structure begins with the comparative-static CGE model ORANI-LA, an
LA-County implementation of the single U.S. region model ORANI-R,
documented in Giesecke (
2011
) and used in Giesecke et al. (
2012
) to examine the
short-run and long-run consequences of an RDD event. ORANI-LA is a single-
region sub-national variant of the well-known single country models ORANI-G
(Horridge
2003
) and ORANI (Dixon et al.
1982
). The model is implemented using
IMPLAN data for LA-County (Minnesota IMPLAN Group
1997
) and relevant
parameter values from the large-scale CGE model of the U.S., USAGE.
4
Production and capital formation is modeled for 72 sectors, along with com-
modity- and agent-specific demands for 15 “margin” commodities.
5
Consistent
with Isard et al. (
1998
), who argue for the importance of modeling transport
margins (the cost of transportations, exclusive of the goods transported) in regional
CGE models, 3 of the 15 margins relate to transport services differentiated by
mode.
6
Decision-making by firms and households is governed by optimizing
behavior. Each representative industry is assumed to minimize costs subject to
3
The model is solved using GEMPACK (Harrison and Pearson
1996
).
4
IMPLAN is a widely-used and accepted resource for small region U.S. input-output tables. A
balanced input-output table is required as an initial solution to the LA-DYN system of equations.
USAGE is a detailed, dynamic CGE model of the U.S. It has been developed at the Centre of
Policy Studies in collaboration with the U.S. International Trade Commission. Prominent
applications of USAGE by the U.S. International Trade Commission include USITC (
2004
and 2007).
5
The starting point for the LA-DYN model is a comparative static LA County model,
implemented with IMPLAN data at the finest level of disaggregation—440 sectors. While
computationally uncomplicated for comparative statics, 440 sectors is not practical for dynamic
modeling. At 72 sectors, our aggregation is based on the standard IMPLAN 64 sector aggregation
scheme, but with expanded detail for trade margins, consistent with a model with a business
district focus.
6
Namely, truck transport, air transport and other transport.
