Development of a large-scale single US region CGE model using IMPLAN data: A Los Angeles county example with a productivity shock application

This paper details the construction of a large-scale computable general equilibrium (CGE) model for a single US region. The model contains a detailed treatment of margins and taxes, features not typically given prominence in US regional CGE models. The starting point for the core of the CGE model s data base is information from IMPLAN, producers of regional I/O data at the US county and state levels. IMPLAN s I/O tables, however, are in producer prices with aggregated treatment of margins and taxes. The methods for reconfiguring the I/O data into basic price flows with direct allocation of imports and a disaggregated treatment of taxes and margins are described. The method is applied to construction of a Los Angeles County model. An illustrative simulation of a productivity improvement in the Los Angeles County economy is then discussed.