Examples of Modelling & Forecasting - Andrew Jamieson, Andrew Hermann

‘ The Environmental Limits on Returning to Economic Growth’ Break-Out Session Two: Examples of Modelling and Forecasting With Andrew Jamieson, Andrew Hermann and Oliver Nicholls

East of England Economic Forecasting Andrew Jamieson (EEDA Insight East) at ARO, 27 th Jan 2010

Background
East of England has 47 local authorities and many other local and regional organisations.
Each has its own priorities, policies, responsibilities, strategies – and they don’t always agree!
We need a view of future trends which (1) everyone can agree on, and (2) separate local and regional decisions and strategies can be based on, to ensure they are consistent with each other.

Why is it necessary?
A forecasting model is a shared base of understanding, and a starting point for discussion.
It recognises the connections between jobs, output (wages, profits, etc), economic sectors, labour supply, housing, etc, across local boundaries.
It produces results which are consistent and comparable across local boundaries.

What people need to know!
Forecasting is not a statement of what we want to happen, nor what will happen.
It is based on past trends, existing knowledge, available data, etc.
Outcomes are sensitive to input data, and some of this is fallible and fluctuating (eg, migration and household size interaction).
For consistency, forecasting needs to be ‘policy neutral’ (that means it doesn’t take into account policy proposals which haven’t been implemented yet, or aren’t reflected in the available data).
Forecasts can be seen as a challenge – what might happen if we do nothing!
For statistical reasons, forecasts for local areas or individual industries, etc, need to be interpreted very carefully.

Developing the East of England Forecasting Model
Very important that local authorities, regional organisations, etc, have confidence in the Model, so . . .
Involve them in its design and content, and
Use data they can trust – good quality national data, or local data collected to a high and consistent standard.
Get suppliers to compete for the contract and provide evidence of their work elsewhere.
Keep local authorities involved in managing the Model and its supplier.
Make sure the supplier writes a Technical Report which explains the structure, assumptions and data of the Model, and make sure this is easy for users to find and easy to read.

Content of the East of England Forecasting Model
Output and jobs in 28 economic sectors
Employment rate
Labour productivity
Unemployment
Population and migration
Housing and households
Data for all local authorities and selected groups of local authorities
Content and capability of Model needs to evolve over time as needs change.
Model needs to be easy to find and easy to use – we use the Insight East website . . .

Insight East Front Page Click on ‘Forecast Model’

EEFM first page Technical Report

Spring 2009 Results page Scenarios

Scenarios
‘ Baseline’ – the “least unlikely outcome” – ie, the average expectation based on past trends, existing knowledge, available data, etc.
‘ Scenario’ – variation on baseline with one or more factors shifted from the average expected value to a less likely (but still possible) value.
Scenarios can be used to test possible effects of policy decisions.
In Spring 2009 two scenarios were linked to output (GVA), and five others were linked to housebuilding (that is, policy decisions).
In Autumn 2009, two scenarios were linked to housebuilding, and one to Local Authorities’ “economic aspirations.”

Spring 2009 Economic Forecasts Baseline and scenarios, and two different spreadsheet formats for each

Economic Forecasts – local area (1) Here is the document to click on

Economic Forecasts – local area (2) Geographic area tabs Use top line to check location

Economic Forecasts – variables (1) 28 industry sectors

Economic Forecasts – variables (2)

Spring 2009 RSS Scenarios

Integrated Policy Model Andrew Hermann West Midlands Regional Observatory West Midlands Regional Observatory 2009

Overview
Background
Key Features
Environmental Limits and Impact Modelling
West Midlands Regional Observatory 2009

Background to IPM
Past Methods
Partial models forecast jobs and population separately
Incompatible assumptions
Integrated policy making requires integrated models
Limitations identified during preparation of RES evidence base
Modelling across local areas within the Region
Initially the 34 local authority districts
Includes interactions between neighbouring areas
Modelling more than just a single theme
Economic and environmental (like REEIO)
Population demographics and housing
Co-determination – each influences the other

How the IPM works What does it cover?
Focus is on long-term trends
Integrating economic and demographic outcomes
Co-determines jobs and housing
Importance of spatial linkages
Feedback and interaction
Results cover economic, demographic and environment indicators
Policy levers
planning consents, transport improvements

How the IPM works What are the key drivers?
Location of jobs depends on
structural change (sectors)
local demand from population and business
access to markets further away
agglomeration/cluster benefits
space constraints
access to workers
Location of population depends on
access to jobs (for working-age population)
space constraints

How the IPM works What are the key relationships in the model? West Midlands Regional Observatory 2009 Jobs (by LAD and sector) Resident workers (by LAD and occupation) Occupied floorspace (by LAD and property type) Occupied dwellings(by LAD) Population (by LAD) Retired population (by LAD Dwellings(by LAD) Floorspace (by LAD and property type) Transport costs between each pair of LADs Utility of Environment indicator (by LAD) Availability of land for housing (by LAD) Availability of land for offices, retail, industry

Uses of the IPM Who could it be used by and for what?
Regional policy makers and strategists
Development of regional strategies
Assessing the impact of different scenarios
Evaluating policy options
Understanding the interaction of economic and spatial policy
Local authorities
Local Economic Assessments
Evaluating policy options
Understanding economic impact of planning policies
Testing the impact of major developments
Investors and Developers
Making business case for investments
Identify priorities for future developments
Understand the wider impact of their plans

Environmental Limitations
Environmental impact not the driving force behind development
CO 2 and energy consumption modelled by industry
Outputs generated through a multiplier and industrial performance

Modelling Environmental Impact West Midlands Regional Observatory 2009

Modelling Environmental Impact West Midlands Regional Observatory 2009 2015

Modelling Environmental Impact West Midlands Regional Observatory 2009 2020

Any questions?
More details on our website www.wmro.org
Email [email_address]
Telephone Anderew Hermann on 0121 202 3247

Examples of Modelling & Forecasting - Andrew Jamieson, Andrew Hermann

by Andy Dunne on Feb 02, 2010

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Examples of Modelling & Forecasting - Andrew Jamieson, Andrew Hermann — Presentation Transcript

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