Doctor of Philosophy
School of Accounting, Economics and Finance, Faculty of Business
Masouman, Ashkan, Economic forecasting, impact analysis and regional planning with a focus on the Illawarra, Doctor of Philosophy thesis, School of Accounting, Economics and Finance, Faculty of Business, University of Wollongong, 2014. http://ro.uow.edu.au/ theses/4260
Purpose – This thesis investigates the Illawarra economy and presents three approaches to conducting policy impact analysis and economic forecasting. The primary focus of the policy analysis and economic forecasting is measuring the changes that occur in regional output, income and employment as a result of different policies and economic activities. This thesis analyses the structural shifts and economic transitions that have taken place in the regional economy over the past two decades to determine the direction of the economy and analyse impacts of different policies and economic activities on the regional economy.
Methodology – There are five methodologies extended from the literature and adopted in this thesis: two standalone traditional models, namely a standalone input-out analysis and a regional econometric model; and three merged models, namely composite, holistic embedded and linked, all of which result from merging the input-output analysis and econometric model. All the aforementioned models are developed considering regional specificities of the Illawarra. The results from the five models are used in two different experiments. The first experiment is a comparative analysis of all the models for an ex-post forecasting of the employment for 2011, using time-series data for 1990-2009 period. The second experiment is an industry significance analysis of 30 sectors with respect to regional output, income and employment.
Findings – The results obtained from the forecasting experiment indicate that the integrated models as a framework produce higher accuracy, less error, and superior performance in comparison to standalone traditional models. Nevertheless, there is a wide variation between the performance and complexity of different integrated methodologies, ranging from highly complex and data intensive as the case for composite to the least data and calibration requirement as the case for the holistic embedded approach. The results obtained from the industry significance experiment indicate that professional and scientific, administrative services and construction sectors have the highest impacts on regional output. Education and training, health and social services, and administrative services sectors have the highest impacts on the regional economy with respect to income. Most importantly, in terms of employment, personal and other services, health and social services, and education and training sectors have the highest impacts on the regional economy.
Research contributions – The practical contributions of this thesis are fourfold. This thesis emphasises the importance of the Illawarra economy as the microcosm of the national economy. Employing the aforementioned methodologies, this thesis forecasts structural changes that are likely to happen in employment, regional output, and income as a result of economic transformation. This thesis investigates the industries that were most important in prompting major shifts in employment, regional output, and income in the past 20 years. Finally, this thesis provides a framework to better analyse the impacts that different policies have on economic structure with respect to regional employment, regional output, and income. The theoretical contributions of this thesis are fivefold. This thesis provides inference that integrated models as a framework, offer more advantages, in comparison with traditional models, in terms of accuracy, dynamic, forecasting, impact analysis, price responsiveness, sectoral disaggregation. This thesis provides empirical results of different integration methodologies compare and contrast when all are applied to a single region. this thesis concludes which integration methodology is appropriate for forecasting and which integration methodology is appropriate for impact analysis. And, finally, it uses empirical evidence to measure fitness of each integration methodology for any region with respect to its socioeconomic specificities.