Regional Impacts of Increasing Energy Prices (MASTER (Metropolitan and State Economic Regions) Model)

摘要

This paper presents the Metropolitan and State Economic Regions (MASTER) model. MASTER forecasts annual economic activity in all 268 Standard Metropolitan Statistical Areas (SMSAs) and 48 non-SMSA Rest-of-State Areas (ROSAs) in the continental United States. Among other variables, MASTER forecasts employment in twelve industrial sectors; employment in each sector is determined by the levels of and annual changes in real electricity and natural gas prices and other factors. Thus, the model is capable of assessing the effects of energy price changes on local economic activity. The remainder of the paper is divided into four sections. In the first, the model is described. Model structure, equation specification, data sources, equation estimation, and model simulation are discussed. MASTER's predictive capabilities are evaluated in the second section. Theil backcast statistics are presented for each of eight US cities. In the third section, the impacts of five different energy-price scenarios on economic activity in each of the eight cities is assessed. Conclusions are discussed in the final section. (ERA citation 08:049237)