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A Community Economic Forecasting and Simulation System: Description of a Satellite Model
Author(s) -
KHAN M. SHAHBAZ,
TREYZ GEORGE I.
Publication year - 1987
Publication title -
growth and change
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.657
H-Index - 55
eISSN - 1468-2257
pISSN - 0017-4815
DOI - 10.1111/j.1468-2257.1987.tb00451.x
Subject(s) - sample (material) , satellite , econometrics , computer science , regression analysis , operations research , economics , mathematics , engineering , chemistry , chromatography , machine learning , aerospace engineering
This paper deals with the problem of modelling sub‐county areas that are so small that county level forecasts cannot be used for policy purposes. Starting from a simple specification that relates demand for local goods and services to local and non‐local income, a system of equations is developed that can be used as a satellite to a county model to forecast impacts of economic events at the town level. Regression coefficients for the equations are estimated using data at the one‐digit SIC code level for a pooled sample of towns in Massachusetts. Model validation tests are reported. An example of an application is provided by simulating impacts of 500 new manufacturing jobs in a town within a county. Our approach yields simulation and forecasting results for both the town and the county.