Transcript Poverty and Income Inequality in Romania : A

Constructing a SAM for
Ireland
Ana Corina Miller
Trinity College Dublin
Research Questions
1.Trade liberalization impacts WTO agricultural trade policy
reforms – Doha Round
2.Further reform of the CAP
3.Climate change (Carbon levy)
4.Bio-fuels production impacts on land-use and cereal prices
Capture the distributional effects on farm/non-farm households
of different food related shocks on the economy
Discuss the construction of the tool box
Methodology and Plan of Work
Constructing a CGE model of the Irish economy with a detailed
representation of the Irish agri-food sector and to link it to a
Microsimulation model
Steps:
 Building a Social Accounting Matrix (SAM)
 Building the Computable General Equilibrium Model
(CGE)
 MS – “building” and linking a Microsimulation model to
the CGE
 Simulations
What’s a SAM?
 Main data structure underlying a CGE Model
 An internally consistent accounting framework
 A snapshot of the economy at a certain time
 Used to calibrate the CGE model to the base year data by
determining key parameters
 Construction closely related to the modelling framework
and policy questions
Why a new SAM ?
 Make use of the new I/O table 2005
 Use the NFS 2005 instead of Capri estimation for the
agricultural sub-matrix
 Facilitate the link the Agro SAM with the NFS at micro
level
 The farm households in the HBS 2005 overlap with those in
the NFS 2005
Steps in constructing a SAM for Ireland
 MACRO Social Accounting Matrix (SAM)
 Complete but unbalanced AGRO SAM
 MICRO SAM
 Balance SAM
Basic Social Accounting Matrix (SAM)
Outlays
Incomes
PRODUCTION
Factors
Activities
0
Gross
Added
Value
Institutions
Production
Factors
Activities
0
0
Commodities
Current
Account
Capital
Account
Rest of the World
(ROW)
Total
National
Product
0
Intermediate
consumption
Other net
taxes on
production
INSTITUTIONS
Commodities
0
0
Aggregate
factor
income
Other net
tax on
production
Total cost
0
Capital A
Total
0
Compensation
of factors
from ROW
Aggregate
factor
income
0
Production
value
Production
0
0
0
Final
consumption
Gross
capital
formation
Exports
Aggregate
demand
Aggregate
income
Net taxes
on products
Current
transfers
0
Current
transfers from
ROW
0
Domestic
savings
Capital
transfers
Capital
transfers from
ROW
Investment
funds
Imports
Current
transfers to
ROW
Capital
transfers from
ROW
0
Transactions
value to
ROW
Aggregate
investment
Transactions
value from
ROW
0
Consumptio
n of factors
to the ROW
Current A
Rest of the
World
(ROW)
Aggregate
supply
Aggregate
income
MACRO SAM
Accounts
 55 Activities producing 55 Commodities
 2 Factors of production –Labour and Capital
 3 Institutions – Households, Government and Enterprises
 3 External Account – UK, REU and ROW
 1 Tax account
 1 Savings/Investments account
MACRO SAM – 65 Square Balanced Matrix.
Main Source of Data for SAM








National Accounts System (CSO2009)
2005 Input-Output Table (CSO2009)
Annual Accounts by Current Account (AACA) (CSO2009)
Annual Review and Outlook for Agriculture and Food
(AROAF) (Department of Agriculture and Food 2007),
Household Budget Survey 2004 –2005 (CSO2005)
Statistical Year Book of Ireland (SYB2008)
Marketing Margins rate derived from the 2005I/O Table
National Farm Survey 2005 (NFS2005)
Ireland MACRO SAM Balanced
INSTITUTIONS
PRODUCTION
FACTORS
OF
PRODUCTION
FACTORS OF
PRODUCTION
ACTIVITIES
CURRENT
ACCOUNT
CAPITAL
ACCOUNT
143,083
ACTIVITIES
EXTERNAL
ACCOUNT
42,657
331,360
PRODUCTS
CURRENT
ACCOUNT
PRODUCTS
188,169
118,182
1,427
18,977
CAPITAL
ACCOUNT
TOTAL
185,740
331,360
98,194
43,937
132,368
462,668
61,072
0
3,409
203,067
38,876
2,864
5,136
46,876
EXTERNAL
ACCOUNT
67,558
-1,319
112,331
4,925
76
TOTAL
185,740
331,360
462,668
203,067
46,877
183,571
183,570
AGRO SAM
 Agricultural, Hunting and Related Services – 12 sectors
producing 13 commodities
 Manufacture of Food and Beverages – 10 sectors producing
10 commodities
 Factors of Production – Labour, Capital, Land
 Taxes – Tax on production, Taxes on products, VAT,
Income/Corporate Tax and Import Duties
 Subsidies
 Trade and Transport Margins
 Export Refunds
AGRO SAM – 171 Square Balanced Matrix
AGRO SAM
 OIIA 2009 identifies 18 types
of commodities: Cattle, Pigs,
Sheep, Horses, Poultry, Milk,
Other Products, Barley, Wheat,
Oats, Potatoes, Sugar Beet,
Mushrooms, Other Fresh
Vegetables, Fresh Fruit, Turf,
Other Crops and Forage Plants
-----12 industries used in the
SAM
 Output Matrix
SAM Sectors
Output, Input and Income in Agriculture 2009
1. Milk
Milk
2. Cattle
Cattle
3. Sheep-Wool
Sheep, share of the other products- EuroStat
specification
4. Pigs
Pigs
5. Poultry- Eggs
Poultry, share of the other products- EuroStat
specification
6. Horses
Horses
7. Cereals
Barley, Wheat, Oats
8.Fruit-Vegetable
Mushrooms, Other Fresh Vegetable, Fresh Fruit
9. Sugar
Sugar Beet
10. Potatoes
Potatoes
11.Forage Plants
Forage Plants
12. Other Crops
Other Crops, Turf
AGRO SAM
Intermediate Consumption
NACE
Code
Total Intermediate Consumption
Intermediate Consumption Matrix
 Data source OIIA2006 – 11
consumption factors
 Supply Balance Table
(CSo2009)
 Use NFS2005 to calculate, for
each type of farm, the shares
of intermediate goods used in
the farm
Value
(€ m)
3,674.0
Seeds & Planting stock
01
85.9
Energy & Lubricants
40
283.5
Electricity
60.5
Gas
0.0
Other fuels
223.0
Fertilisers – outside
24
363.3
Plant Protection
24
55.9
Veterinary Expenses
24
114.6
Feeding stuffs
1,649.4
Feed outside
15
874.6
Feed inside
01
774.8
Maintenance Materials
45
278.6
Maintenance Buildings
45
70.6
Agricultural Services
01
270.1
Financial Services
65
91.0
Other goods & services
411.0
AGRO SAM
Factor of Production – Land
 NFS2005 – shares of
farm livestock
%
Value €m
Milk
20.97
98.97
Cattle
65.01
306.71
Sheep
13.40
63.21
Horses
0.62
2.90
99.99
471.78
Total animal Farming
Hectares
%
Value €m
Cereals
282.00
6.56
54.08
Potatoes
11.80
0.27
2.26
Sugar
35.00
0.81
6.71
Vegetable
4.10
0.10
0.79
Fruits
1.60
0.04
0.31
Other Crops
20.90
0.49
4.01
Silage
1,198.30
27.85
229.81
Hay
242.30
5.63
46.47
Pasture
1,988.70
46.23
381.40
Rough Grazing
471.50
10.96
90.43
Total
4,302.00
100.00
825.05
AGRO SAM
 Factors of production – Labour- for each farm is calculated
the share of labour using the standard man day (SMD)
variable.
 Factor of production – Capital is allocated across the 12
new agricultural sectors according to the capital
depreciation variable reported in NFS2005
 A control tool in disaggregating the value added was Henry
estimates – approximately 50% is attributed to the labour
input, 30% to capital and the remaining 20% to land
Further work
 Treatment of land – wide use, limited use and very limited use
(forestry)
 Treatment of farm households - possible disaggregation: dairying,
dairying & other, cattle rearing, cattle & other, mainly sheep, mainly
tillage
 Integration of CAP policy instruments
 Labour supply would be elastic and mobile
Macro-Micro Link
The basic problem encountered is how to link the microdata
from the HBS/NFS surveys to the CGE model.
– Integration approach, Cockburn (2001)
Reconcile the survey data with the accounts in the SAM
The SAM is rebalanced – Cross Entropy Method (Robilliard and
Robinson, 2003)
The farm /non-farm households’ behaviour is represented by LES
function and the differences in marginal shares of goods
consumption determines the response that household takes
Thank you