A general equilibrium analysis of financing options for a large scale mass transit system in Bangkok

Pomlaktong, Narong. (1998). A general equilibrium analysis of financing options for a large scale mass transit system in Bangkok PhD Thesis, School of Economics, The University of Queensland.

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Author Pomlaktong, Narong.
Thesis Title A general equilibrium analysis of financing options for a large scale mass transit system in Bangkok
School, Centre or Institute School of Economics
Institution The University of Queensland
Publication date 1998
Thesis type PhD Thesis
Supervisor Associate Professor George E. Docwra
Dr. Guy R. West
Total pages 365
Language eng
Subjects 1502 Banking, Finance and Investment
Formatted abstract

This thesis is concerned with developing a computable general equilibrium (CGE) model for the purpose of analysing a number of issues concerned with the evaluation of a large scale urban rail transit system for the city of Bangkok.

A large scale urban mass transit system was recommended to the Thai government in 1993 by the Metropolitan Rapid Transit Authority (MRTA) Initial System Consultancy Group. The Thai government has recently engaged in efforts to attract private participation in the proposed system. The project is capital intensive in nature and characterised by increasing returns to scale. It raises a number of issues for the government and policy advisers. These include the impacts of alternative financing and pricing proposals and the effects of the project on numerous sectors of the economy.

Computable general equilibrium (CGE) models rectify the weaknesses experienced by both partial equilibrium cost-benefit analysis (CBA) and input-output analysis by incorporating price effects and economy-wide constraints as well as re-calculating prices of goods and services in response to policy changes and changes in the macroeconomic environment of the economy. This makes CGE models potentially attractive to the analysis of large projects.

This thesis aims to examine financing alternatives of a large mass rail transit system in Bangkok within an economy-wide CGE framework. To do so, this study constructs a CGE model (referred to as the B-TRIM-the Bangkok TRansport Investment Model) to examine the economy-wide impact of a mass transit project in Bangkok. To assess the impact on the local economy where the project is situated, this study assembles an Input-Output database for the Bangkok Metropolitan Region (BMR) economy as a primary database for the CGE model. In order to explore the impact of pricing policy of the mass transit service on the BMR economy, this study links a sub-model describing pricing behavior of the transport sector into the main CGE model. This study uses the B-TRIM to simulate the consequences of three financing scenarios (e.g., with varying degrees of private participation in financing the project) considered by the MRTA, a government agency hosting the mass transit project in question.

The simulation results demonstrate that the choice of funding options would affect the economy (i.e. the macroeconomic performance, sectoral outputs and household consumption) differently during the MRTA construction and operational phases. The resulting consequences (e.g. the trade imbalance and distributional consequences on production sectors and households) have some political relevance which policy makers should take into account. In this respect, a CGE framework can serve as a political resource as well as a normative guide for policy makers in exercising their value judgments. It is concluded that large scale project development warrants an assessment using the CGE framework in association with other techniques.

Keyword Local transit -- Thailand -- Bangkok -- Finance
Equilibrium (Economics)
Additional Notes

Variant title Half-title and cover title: Computable general equilibrium analysis of financing options for a large scale mass transit system in Bangkok

Computable general equilibrium

Document type: Thesis
Collection: UQ Theses (RHD) - UQ staff and students only
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Created: Fri, 25 Feb 2011, 11:12:05 EST by Ning Jing on behalf of The University of Queensland Library