Agricultural economy/Description: Difference between revisions
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The MAGNET model [[Woltjer et al., 2011]] is based on the standard GTAP model (Hertel, 1997]], which is a multi-regional, static, applied computable general equilibrium (CGE) model based on neoclassical microeconomic theory. Although it covers the entire economy, there is a special focus on agricultural sectors. The MAGNET model is a further development of GTAP regarding land use, household consumption, livestock, food, feed and energy crop production, and emission reduction cost calculations. | The MAGNET model [[Woltjer et al., 2011]] is based on the standard GTAP model (Hertel, 1997]], which is a multi-regional, static, applied computable general equilibrium (CGE) model based on neoclassical microeconomic theory. Although it covers the entire economy, there is a special focus on agricultural sectors. The MAGNET model is a further development of GTAP regarding land use, household consumption, livestock, food, feed and energy crop production, and emission reduction cost calculations. | ||
===Demand and supply===: Household demand for agricultural products is calculated as a function of income, income elasticities, price elasticities, and cross-price elasticities. Income elasticities for agricultural commodities are consistent with FAO estimates (Britz 2003), and dynamically depend on purchasing power parity corrected GDP per capita. The supply of all commodities is modelled by an input–output structure that explicitly links the production of goods and services for final consumption via different stages of processing back to primary goods (crops and livestock products) and resources. At each production level, input of labour, capital, and intermediate input or resources (e.g. land) can substitute each other. For example, labour, capital and land are input factors in crop production, and substitution of these production factors is driven by changes in their relative prices. If the price of one input factor increases, it is substituted by other factors, following the price elasticity of substitution. | === Demand and supply ===: Household demand for agricultural products is calculated as a function of income, income elasticities, price elasticities, and cross-price elasticities. Income elasticities for agricultural commodities are consistent with FAO estimates (Britz 2003), and dynamically depend on purchasing power parity corrected GDP per capita. The supply of all commodities is modelled by an input–output structure that explicitly links the production of goods and services for final consumption via different stages of processing back to primary goods (crops and livestock products) and resources. At each production level, input of labour, capital, and intermediate input or resources (e.g. land) can substitute each other. For example, labour, capital and land are input factors in crop production, and substitution of these production factors is driven by changes in their relative prices. If the price of one input factor increases, it is substituted by other factors, following the price elasticity of substitution. | ||
===Regional aggregation and trade===: MAGNET is flexible in its regional aggregation (129 regions). For the link with IMAGE, it distinguishes single European countries and, in addition to Europe, 22 large world regions, closely matching the regions in IMAGE (Figure zzz IMAGE regions). Similar to most other CGE models, MAGNET assumes that products traded internationally are differentiated according to country of origin, i.e. domestic and foreign products are not fully identical, but are imperfect substitutes (the so-called Armington assumption (Armington 1969)). | === Regional aggregation and trade ===: MAGNET is flexible in its regional aggregation (129 regions). For the link with IMAGE, it distinguishes single European countries and, in addition to Europe, 22 large world regions, closely matching the regions in IMAGE (Figure zzz IMAGE regions). Similar to most other CGE models, MAGNET assumes that products traded internationally are differentiated according to country of origin, i.e. domestic and foreign products are not fully identical, but are imperfect substitutes (the so-called Armington assumption (Armington 1969)). | ||
Land use: In addition to the standard GTAP model, MAGNET includes a dynamic land supply function (Van Meijl et al. 2006) that accounts for the availability and suitability of land for agricultural use, based on information from IMAGE (see below, and Figure 4.2.1). A nested land-use structure accounts for the different degrees of substitutability between types of land use (Huang et al. 2004; Van Meijl et al. 2006). In addition, the MAGNET model includes international and EU agricultural policies, such as production quota and export\import tariffs (Helming et al. 2010). | Land use: In addition to the standard GTAP model, MAGNET includes a dynamic land supply function (Van Meijl et al. 2006) that accounts for the availability and suitability of land for agricultural use, based on information from IMAGE (see below, and Figure 4.2.1). A nested land-use structure accounts for the different degrees of substitutability between types of land use (Huang et al. 2004; Van Meijl et al. 2006). In addition, the MAGNET model includes international and EU agricultural policies, such as production quota and export\import tariffs (Helming et al. 2010). | ||
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===Intensification of crop and pasture production===: Crop and pasture yields in MAGNET may change as a result of the following four processes: | ===Intensification of crop and pasture production===: Crop and pasture yields in MAGNET may change as a result of the following four processes: | ||
#autonomous technological change (external scenario assumption); | #autonomous technological change (external scenario assumption); | ||
#intensification due to the substitution of production factors (endogenous); | |||
#climate change (from IMAGE); | |||
#change in agricultural area affecting crop yields (e.g. decreasing average yields due to expansion into less suitable regions) (from IMAGE). | |||
For the biophysical yield effects due to climate and area changes, yields as calculated by IMAGE’s crop model are communicated to MAGNET. External assumptions on autonomous technological changes are mostly based on FAO projections (Bruinsma 2003). They describe. per region and commodity, the assumed future changes in yields for a wide range of crop types. In MAGNET, the biophysical yield changes are combined with the autonomous technological change, to give the total exogenous yield change. In addition, during the simulation period, MAGNET calculates an endogenous intensification as a result of price-driven substitution between labour, land and capital. In IMAGE, regional yield changes due to both autonomous technological change and endogenous intensification according to MAGNET are used in the spatially explicit allocation of land use (Section 4.2.3). | |||
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Revision as of 17:03, 5 December 2013
Parts of Agricultural economy/Description
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