A review of the formulation and application of the spatial equilibrium models to analyze policy

P S Hieu; Steve R Harrison

doi:10.1007/s11676-011-0209-1

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A review of the formulation and application of the spatial equilibrium models to analyze policy

Journal article

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Peer reviewed

A review of the formulation and application of the spatial equilibrium models to analyze policy

P S Hieu and Steve R Harrison

Journal of Forestry Research, Vol.22(4), pp.671-679

2011

DOI: https://doi.org/10.1007/s11676-011-0209-1

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Abstract

simplex method

reduced-gradient

linear programming

nonlinear programming

mixed complementary programming

This paper reviews alternative market equilibrium models for policy analysis. The origin of spatial equilibrium models and their application to wood and wood-processing industries are described. Three mathematical programming models commonly applied to solve spatial problems - namely linear programming, non-linear programming and mixed complementary programming - are reviewed in terms of forms of objective functions and constraint equalities and inequalities. These programming are illustrated with numerical examples. Linear programming is only applied in transportation problems to solve quantities transported between regions when quantities supplied and demanded in each region are already known. It is argued that linear programming can be applied in broader context to transportation problems where supply and demand quantities are unknown and are linear. In this context, linear programming is seen as a more convenient method for modelers because it has a simpler objective function and does not require as strict conditions, for instance the equal numbers of variables and equations required in mixed complementary programming. Finally, some critical insights are provided on the interpretation of optimal solutions generated by solving spatial equilibrium models. © 2011 Northeast Forestry University and Springer-Verlag Berlin Heidelberg.

Details

Title: A review of the formulation and application of the spatial equilibrium models to analyze policy
Authors: P S Hieu (Author) - Ministry of Agriculture and Rural Development in Vietnam, Vietnam
Steve R Harrison (Author) - University of Queensland
Publication details: Journal of Forestry Research, Vol.22(4), pp.671-679
Publisher: Dongbei Linye Daxue
Date published: 2011
DOI: 10.1007/s11676-011-0209-1
ISSN: 1007-662X
Copyright note: Copyright © Springer-Verlag 2011. The author's accepted version is reproduced here in accordance with the publisher's copyright policy. The final publication is available at www.springerlink.com
Organisation Unit: University of the Sunshine Coast, Queensland
Language: English
Record Identifier: 99449253502621
Output Type: Journal article

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