gemExternality_Negative: Some Examples Illustrating Negative Externality

In GE: General Equilibrium Modeling

Some Examples Illustrating Negative Externality

Description

Some examples illustrating negative externality.

Usage

gemExternality_Negative(...)

Arguments

...	arguments to be passed to the function sdm2.

Examples

#### negative externality of consumption to consumption
# Here the distortion means that an agent
# will use environmental resources for free.
dst.consumer1.distorted <- node_new("util",
  type = "CD",
  alpha = 1, beta = c(0.5, 0.5),
  "lab", "land"
)

dst.consumer1 <- node_new("util",
  type = "CD",
  alpha = 1, beta = c(0.5, 0.5),
  "lab", "cc1"
)
node_set(dst.consumer1, "cc1",
  type = "Leontief",
  a = c(1, 1),
  "land", "env"
)

dst.consumer2 <- node_new(
  "util",
  type = "CD",
  alpha = 1, beta = c(0.4, 0.4, 0.2),
  "lab", "land", "env"
)

ge.externality <- sdm2(
  A = list(dst.consumer1.distorted, dst.consumer2),
  B = matrix(0, 3, 2),
  S0Exg = matrix(c(
    50, 0,
    0, 50,
    0, 0
  ), 3, 2, TRUE),
  names.commodity = c("lab", "land", "env"),
  names.agent = c("consumer1.distorted", "consumer2"),
  numeraire = "lab",
  policy = function(state) {
    last.D <- state$last.A %*% dg(state$last.z)
    state$S[3, 2] <- 100 - last.D[2, 1]
    state
  }
)

ge.externality$p
ge.externality$z
addmargins(ge.externality$D, 2)
addmargins(ge.externality$S, 2)

ge <- sdm2(
  A = list(dst.consumer1, dst.consumer2),
  B = matrix(0, 3, 2),
  S0Exg = matrix(c(
    50, 0,
    0, 50,
    13, 87
  ), 3, 2, TRUE),
  names.commodity = c("lab", "land", "env"),
  names.agent = c("consumer1", "consumer2"),
  numeraire = "lab"
)

ge$p
ge$z
addmargins(ge$D, 2)
addmargins(ge$S, 2)

## A corrective tax is imposed on distorted consumer 1.
# 54% of tax revenue is allocated to distorted consumers 1, 46% to consumers 2.
dst.consumer1.distorted.taxed <- node_new("util",
                                          type = "CD",
                                          alpha = 1, beta = c(0.5, 0.5),
                                          "lab", "cc1"
)
node_set(dst.consumer1.distorted.taxed, "cc1",
         type = "FIN", rate = c(1, ge$DV[3, 1] / ge$DV[2, 1]),
         "land", "tax"
)

ge.corrective.tax <- sdm2(
  A = list(dst.consumer1.distorted.taxed, dst.consumer2),
  B = matrix(0, 4, 2),
  S0Exg = matrix(c(
    50, 0,
    0, 50,
    0, 0,
    54, 46
  ), 4, 2, TRUE),
  names.commodity = c("lab", "land", "env", "tax"),
  names.agent = c("consumer1.distorted", "consumer2"),
  numeraire = "lab",
  policy = function(state) {
    last.D <- state$last.A %*% dg(state$last.z)
    state$S[3, 2] <- 100 - last.D[2, 1]
    state
  }
)

ge.corrective.tax$z
addmargins(ge.corrective.tax$D, 2)
addmargins(ge.corrective.tax$S, 2)

## negative externality of production to consumption
dst.firm1.distorted <- dst.consumer1.distorted
dst.firm1 <- dst.consumer1

dst.consumer1.Leontief <- node_new(
  "util",
  type = "Leontief",
  a = 1,
  "prod1"
)

ge.externality <- sdm2(
  A = list(dst.firm1.distorted, dst.consumer1.Leontief, dst.consumer2),
  B = diag(c(1, 0, 0), 4, 3),
  S0Exg = matrix(c(
    NA, NA, NA,
    NA, 50, NA,
    NA, NA, 50,
    NA, NA, NA
  ), 4, 3, TRUE),
  names.commodity = c("prod1", "lab", "land", "env"),
  names.agent = c("firm1", "consumer1.Leontief", "consumer2"),
  numeraire = "lab",
  policy = function(state) {
    last.D <- state$last.A %*% dg(state$last.z)
    state$S[4, 3] <- 100 - last.D[3, 1]
    state
  }
)

ge.externality$p
ge.externality$z
addmargins(ge.externality$D, 2)
addmargins(ge.externality$S, 2)

ge <- sdm2(
  A = list(dst.firm1, dst.consumer1.Leontief, dst.consumer2),
  B = diag(c(1, 0, 0), 4, 3),
  S0Exg = matrix(c(
    NA, NA, NA,
    NA, 50, NA,
    NA, NA, 50,
    NA, 13, 87
  ), 4, 3, TRUE),
  names.commodity = c("prod1", "lab", "land", "env"),
  names.agent = c("firm1", "consumer1.Leontief", "consumer2"),
  numeraire = "lab"
)

ge$p
ge$z
addmargins(ge$D, 2)
addmargins(ge$S, 2)

#### negative externality of consumption to production and consumption
dst.firm2 <- dst.consumer2
dst.consumer2.Leontief <- node_new(
  "util",
  type = "Leontief",
  a = 1,
  "prod2"
)

ge.externality <- sdm2(
  A = list(dst.firm2, dst.consumer1.distorted, dst.consumer2.Leontief),
  B = diag(c(1, 0, 0), 4, 3),
  S0Exg = matrix(c(
    NA, NA, NA,
    NA, 50, NA,
    NA, NA, 50,
    NA, NA, NA
  ), 4, 3, TRUE),
  names.commodity = c("prod2", "lab", "land", "env"),
  names.agent = c("firm2", "consumer1", "consumer2.Leontief"),
  numeraire = "lab",
  policy = function(state) {
    last.D <- state$last.A %*% dg(state$last.z)
    state$S[4, 3] <- 100 - last.D[3, 2]
    state
  }
)

ge.externality$p
ge.externality$z
addmargins(ge.externality$D, 2)
addmargins(ge.externality$S, 2)

ge <- sdm2(
  A = list(dst.firm2, dst.consumer1, dst.consumer2.Leontief),
  B = diag(c(1, 0, 0), 4, 3),
  S0Exg = matrix(c(
    NA, NA, NA,
    NA, 50, NA,
    NA, NA, 50,
    NA, 13, 87
  ), 4, 3, TRUE),
  names.commodity = c("prod2", "lab", "land", "env"),
  names.agent = c("firm2", "consumer1", "consumer2.Leontief"),
  numeraire = "lab"
)

ge$p
ge$z
addmargins(ge$D, 2)
addmargins(ge$S, 2)

## negative externality of production to production and consumption
ge.externality <- sdm2(
  A = list(dst.firm1.distorted, dst.firm2, dst.consumer1.Leontief, dst.consumer2.Leontief),
  B = diag(c(1, 1, 0, 0), 5, 4),
  S0Exg = matrix(c(
    NA, NA, NA, NA,
    NA, NA, NA, NA,
    NA, NA, 50, NA,
    NA, NA, NA, 50,
    NA, NA, NA, NA
  ), 5, 4, TRUE),
  names.commodity = c("prod1", "prod2", "lab", "land", "env"),
  names.agent = c("firm1", "firm2", "consumer1.Leontief", "consumer2.Leontief"),
  numeraire = "lab",
  policy = function(state) {
    last.D <- state$last.A %*% dg(state$last.z)
    state$S[5, 4] <- 100 - last.D[4, 1]
    state
  }
)

ge.externality$p
ge.externality$z
addmargins(ge.externality$D, 2)
addmargins(ge.externality$S, 2)

ge <- sdm2(
  A = list(dst.firm1, dst.firm2, dst.consumer1.Leontief, dst.consumer2.Leontief),
  B = diag(c(1, 1, 0, 0), 5, 4),
  S0Exg = matrix(c(
    NA, NA, NA, NA,
    NA, NA, NA, NA,
    NA, NA, 50, NA,
    NA, NA, NA, 50,
    NA, NA, 13, 87
  ), 5, 4, TRUE),
  names.commodity = c("prod1", "prod2", "lab", "land", "env"),
  names.agent = c("firm1", "firm2", "consumer1.Leontief", "consumer2.Leontief"),
  numeraire = "lab"
)

ge$p
ge$z
addmargins(ge$D, 2)
addmargins(ge$S, 2)

## negative externality of consumption to production
dst.firm2.distorted <- node_new(
  "util",
  type = "CD",
  alpha = 1, beta = c(0.5, 0.5),
  "lab", "land"
)

ge.externality <- sdm2(
  A = list(dst.firm2.distorted, dst.consumer1.distorted, dst.consumer2.Leontief),
  B = diag(c(1, 0, 0)),
  S0Exg = matrix(c(
    NA, NA, NA,
    NA, 50, NA,
    NA, NA, 50
  ), 3, 3, TRUE),
  names.commodity = c("prod2", "lab", "land"),
  names.agent = c("firm2.distorted", "consumer1", "consumer2.Leontief"),
  numeraire = "lab",
  policy = function(A, state) {
    last.D <- state$last.A %*% dg(state$last.z)
    state$S[1, 1] <- (100 - last.D[3, 2])^0.2 * state$S[1, 1]^0.8
    state
  }
)

ge.externality$p
ge.externality$z
addmargins(ge.externality$D, 2)
addmargins(ge.externality$S, 2)

GE documentation built on Nov. 8, 2023, 9:07 a.m.