It is generally recognized that a SOC investment largely impacts on a national economy since the SOC is characterized by a joint-consumption good. Various changes in an economy are thus made due to the SOC investment. The changes here are represented by system changes of land use and transportation, industrial output across regions, unbalanced development, and etc. Therefore, it is very natural to say that a SOC investment policy must be comprehensively evaluated. The current research attempts to develop a model to comprehensively evaluate a SOC investment policy, which makes it possible to determine the priority order of potential projects.
This research consists of four modules as follows: The first module constructs a price multi-region input-output model to analyze the price changes resulting from the interregional SOC investment. The second module also constructs a model in a land use-transportation general equilibrium framework to estimate the policy impacts such as industrial output, location surplus, land price, land use and intra (and inter)- regional transportation demand. Actually, the result of the second module is obtained from the results of the first module. The third module presents a method to analyze the various spread effects of the SOC investment policy. Finally, the cost and benefit analysis framework is suggested for the SOC investment policy in the fourth module. The benefit-cost ratio and the net benefit of the project are employed as an economic index for evaluating the economic properness of the project.
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