The TERM Model

Contents

The TERM multi-regional CGE model
Purchase TERM for Australia or USA
TERM developments
Documentation of TERM
TERM Training courses
TERM for other countries
Download Australian TERM model and data

map of world
Countries shaded red are modelled by variants of the TERM model


The TERM multi-regional CGE model

TERM (The Enormous Regional Model) is a "bottom-up" CGE model which treats each region as a separate economy. The key feature of TERM, in comparison to predecessors such as MMRF, is its ability to handle a greater number of regions or sectors. The first TERM master database distinguished 144 sectors and 57 regions (nearly corresponding to the Australian Statistical Divisions). More recently, TERM has been extended to represent 182 sectors in 205 statistical sub-divisions (SSDs): this allows us to split major cities into regions, and represent water catchment and tourism regions. The high degree of regional detail makes TERM a useful tool for examining the regional impacts of shocks (especially supply-side shocks) that may be region-specific. Finally, TERM has a particularly detailed treatment of transport costs and is naturally suited to simulating the effects of improving particular road or rail links.

Variable aggregation facility

Even though TERM is computationally efficient, it would be slow to solve if a full 182-sector, 57- or 205-region database were used. In practice, we must aggregate sectors or regions so that [the number of sectors] plus [the number of sectors] does not exceed 100. The TERM database programs facilitate this aggregation. The choice of sectors or regions to aggregate is application-specific. For example, we could design aggregated regions which followed the boundaries of climatic zones or watersheds, or which highlighted the distinction between metropolitan and rural regions. Similarly the sectoral aggregation would be tailored to a particular simulation.

Purchase TERM for Australia, USA or China

Versions of the TERM model and data can be purchased for Australia or for the USA or for China.

TERM developments

Further regional disaggregation

Since September 2006 we have been developing a new TERM feature: a "top-down" disaggregation of employment and income within each Statistical Division to the SLA (Statistical Local Area) level. That is, results originally generated for the 57 SDs may be broken down according to Australia's 1379 SLAs. Although we have reservations about the realism of results at SLA level, we anticipate that the facility may prove useful when used with care. For example, it would enable us to say how residents of Sydney's western suburbs (a group of SLAs) fared relative to other Sydneysiders. See COPS archive item TPMH0074 for an example of this approach.

Subsequently, the SLA data gathered from the 2006 census became the foundation for the SSD region representation mentioned above. In practice, we could prepare a full bottom-up database for any combination of the 1300+ SLA regions in the 2006 census (and more recently the 2011 census). However, the SSD representation for most practical purposes has been a sufficient representation of small regions.

Using TERM-H2O to analyze water shortage and trading

Glyn Wittwer has developed a special version of TERM, TERM-H2O, to analyse the economic impacts of water shortage and of water trading. Simulations are described in a series of working papers G-186, G-222, G-228 and G-232, and in a book mentioned below.

Related journal publications include:

Previously a group at the Australian Productivity Commission used a version of TERM to see if water trading could alleviate drought. This was published as Peterson, Dwyer, Appels & Fry(2005), Water Trade in the Southern Murray-Darling Basin, The Economic Record 81. An earlier version of the paper is here.

Dynamic TERM

The original version of TERM is a comparative static model. It shows, for a single year, the differences produced in the regional economies by changes in taxes, techonology, tariffs and other exogenous variables. Glyn Wittwer has recently developed a multiperiod version of TERM for Australia. This incorporates dynamic features similar to the MONASH model:

For an application of dynamic TERM, see: Dynamic general equilibrium analysis of improved weed management in Australia's winter cropping systems, by Glyn Wittwer, David T. Vere, Randall E. Jones, Garry R. Griffith, The Australian Journal of Agricultural and Resource Economics, December 2005 - Vol. 49, Issue 4, pp 363-377, Blackwell.

Other dynamic versions of TERM exist for Indonesia, Brazil and Finland.

Enquiries about consultancies using the Australian or Chinese versions of TERM should be addressed to Dr. Glyn Wittwer. He has used dynamic TERM for projects with Plant Health Australia and Geoscience Australia. Current clients include the Murray-Darling Basin Authority. To apply TERM to other countries, contact Mark Horridge.

Dynamic TERM with a labour market module

Using theory and data prepared by Janine Dixon for a national model, a version of dynamic TERM now includes a labour market module which links industries, occupations, skills and regions.

TERM Training courses

TERM training courses are held periodically: upcoming courses are advertised here. The next is in Warsaw, Sep 2016. Past courses have been presented in South Africa 2011, Warsaw 2011, Sydney 2012, Warsaw 2013 and Bandung 2014. Typical course programs are here and here.

Documentation of TERM

See COPS archive item TPMH0057 for a technical description of the model and database. An earlier version of the same paper is working paper no. G-141. Other applications are described in COPS archive items TPGW0050 and TPGW0076. An example of the standard or "reference" version of comparative static TERM as at December 2012 may be found in COPS archive item TPMH0117. Some published articles on the Australian version of TERM are:

You can also see lists of publications about the Chinese and Brazilian versions of TERM.


A complete worked example of TERM database production can be found here.

See a comparison of CoPS regional CGE models here.

map of australia
Some results from the Australian version of TERM

TERM for other countries

Versions of TERM have been prepared for Brazil, China, Finland, Indonesia, Italy, Japan, Korea, New Zealand, Poland, South Africa, Sri Lanka, Sweden and USA.

The Chinese version is described on this page.

An example of the Polish version may be found in COPS archive item TPMH0117.

An Indonesian version may be downloaded from COPS archive item TPMH0118. An earlier Indonesian version, named EMERALD, is described in COPS archive item TPDP0038. See also TPGW0076, or Google for "Pambudi Alfian CGE Emerald". Two articles based on EMERALD are:

Some Brazilian TERM results are presented in COPS archive items TPJB0095 and PPJB0078. See also Brazil. Or, Google for "Joaquim Bento CGE TERM"

An application of the US model, USAGE-TERM is described here.

Download Australian TERM model and data

You can download and run a miniature version of the original Australian TERM yourself if you have source code GEMPACK. Download this ZIP file and study the README.TXT it contains.