Yerushalmi, Erez (2012) Essays in applied public economics using computable general equilibrium models. PhD thesis, University of Warwick.

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Abstract

This thesis analyses two issues in public economics: (1) water allocation in Israel;
and (2) malaria prevention in Ghana. In both cases a computable general equilibrium
modelling approach has been applied for policy analysis.
Part I: In Israel, parliamentary investigative committees and water researchers
have concluded that for decades, the administrative water allocation mechanism has
mismanaged water allocation. Over subsidising of the agricultural sector, and underfunding
of desalination plants, had led to a severe hydrological deficit. Critics
argue that a water market allocation could solve these issues. However, the administrative
allocation is crucial because it protects social value, which is not represented
in a market mechanism. Part I of the thesis compares these two alternative allocation
mechanisms using a general equilibrium model, for the case of Israel. The
model concludes that from 1995 to 2006, the upper-bound water misallocation in
Israel was relatively small, on the average of 5.5% of the potable water supply. The
lower-bound value of agricultural amenities is imputed at approximately 2.3 times
agricultural economic output. At the margin, introducing a water market in Israel is
not recommended, i.e., net-social welfare would fall.
Part II: Research that links between malaria and economic growth have, so far,
used econometric approaches. These provide results that are too broad, and not
particularly useful for policy analysis. We, therefore, develop a multi-region multihousehold
dynamic computable general equilibrium (DCGE) model, which is calibrated
to Ghana as a case study. Households are disaggregated by five epidemiological
malaria regions, urban-rural divide, and income level quintiles. The model links with
malaria through regional demographic effects, and labour effectiveness indices. Hypothetical
interventions simulate reducing malaria prevalence by 50%, for children
under-five years with varying degrees of coverage. We find that even under this limited
intervention, malaria prevention clearly adds to economic growth and reduces
income inequality. Our approach is particularly useful for policy makers to compare
alternative intervention strategies using cost-benefit methods, which are not commonly
used in health policy.

Item Type:	Thesis or Dissertation (PhD)
Subjects:	H Social Sciences > HB Economic Theory
Library of Congress Subject Headings (LCSH):	Computable general equilibrium models, Welfare economics, Economic policy -- Econometric models, Equilibrium (Economics) -- Mathematical models, Malaria -- Economic aspects -- Ghana, Water-supply -- Economic aspects -- Israel
Official Date:	October 2012
Dates:	Date Event October 2012 Submitted
Institution:	University of Warwick
Theses Department:	Department of Economics
Thesis Type:	PhD
Publication Status:	Unpublished
Supervisor(s)/Advisor:	Perroni, Carlo; Zhang, Lei, Dr.
Sponsors:	University of Warwick
Extent:	xv, 173 leaves : charts.
Language:	eng

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