This report provides an introduction to the use of computable general equilibrium (CGE) models for transport policy analysis. The steps involved in the construction and use of CGE models are first dis-cussed in general terms, starting with clarification of the policy issue to be addressed, and finishing with the interpretation of simulation results. The foundation in general equilibrium and public eco-nomic theory of CGE models for transport policy analysis is then explained, and finally the approach as applied to transport policy analysis is illustrated taking the introduction of road pricing as an ex-ample. The results of the analysis highlight the importance in the context of evaluating changes in transport policy and investments in transport infrastructure to take into account, not only the effect on the traffic and related effects on pollution, road congestion and accidents, but also the effect on the tax base, mainly through the effect on the labour supply, and the income distributional effects. (Author/publisher)
Abstract