Design of a CGE Model to Evaluate Investment in Transport Infrastructures: An Application for Iran

Abstract

The present paper attempts to design a country scale Computational General Equilibrium (CGE) model to assess the effects of investment in transport infrastructure. Unlike the previous studies, our model covers impacts of infrastructure expansion on time travel and efficiency of transport capital, simultaneously. After designing, using Iran's Social Accounting Matrix (SAM) data, we apply the model for evaluating the impacts of infrastructure expansion in different modes of transport. Simulation results show that investment in railways has the most effects on Iran's economic growth and employment than other modes. On the other hand, our results also show that investment in roads can affect household's welfare more than other infrastructure expansions.