The Relu-Tran Model
The Relu-Tran Model
The Regional Economy, Land Use and Transportation Model(RELU-TRAN) is a computable general equilibrium model of a metropolitan economy, designed to treat the effects of a variety of changes and policies on a metropolitan area. Based on microeconomic theory, the model treats the decisions of consumers, firms and real estate developers. The government is treated as a levier of various taxes and as a regulator of land use, building stocks and environmental quality.
Consumers in RELU-TRAN make decisions on where in a metropolitan area to work and where to reside, how much housing floor space to consume at the place of residence and how many non-work trips to make to various destinations where goods and services can be acquired. Hours supplied to a workplace compete against travel time allocated to commuting and to non-work trips. Consumers also decide which mode of transportation (car, public transit or non-motorized) to use on a trip and what travel route of the transport network to utilize in the case of a car trip. Car type and route choices involve a fuel economy decision and travel is subject to traffic congestion. The fuel economy of the vehicle and the level of congestion determine the level of gasoline consumed and the CO2 and other pollutants emitted. RELU-TRAN can treat a number of consumer types by income, family size and other characteristics.
Firms in RELU-TRAN are classified into industries. These industries can export their outputs and are interconnected via inter-industry demand relationships not only to each other but also to industries in the rest of the world. The retail industry sells directly to the consumer but can also export. In addition to the intermediate inputs purchased from the other industries, the primary input groups of an industry include business capital, buildings and land and labor of all skill levels.
Developers in RELU-TRAN are the investors in developable land and existing buildings. Income from consumers or firms renting these assets and expected capital gains or losses from redevelopment, construction or demolition combine to determine the profitability of each type of real estate investment and how much developers would construct, demolish or redevelop.
The government sector of RELU-TRAN controls a number of tax instruments such as income tax, ad-valorem property tax, quasi-Pigouvian tolls on traffic congestion, taxes on parking, cordon tolls and a gasoline, while a variety of other taxes on consumers and firms can be treated and the revenue from such taxation can be allocated among consumers endogenously. The government can also control land-use specific lot size or floor-area-ratio zoning regulations as well as controls on aggregate land use such as those of urban growth boundaries or growth management controls. The model is designed to evaluate the costs and benefits of such policies and change scenarios, and to produce measures of welfare changes.
The development of the RELU-TRAN model at the State University of New York at Buffalo by Alex Anas was funded by the National Science Foundation Urban Research Initiative award SES 9816816 and award RD-83184101-0 from the United States Environmental Protection Agency’s Science to Achieve Results (STAR) competition.
The published articles listed on this website provide background of the RELU-TRAN model and its theoretical antecedents. For a description of RELU-TRAN’s earlier version, not including car-choice and environmental component, see Anas and Liu (2007). The theoretical antecedents are Anas-Kim (1996) which treated the interactions between agglomerative forces in business location and traffic congestion, including potential measures of consumer-business interactions; Anas-Xu (1999) that introduced into theoretical urban economics the simultaneous decentralization of firms and consumers in a general equilibrium setting with traffic congestion; Anas-Rhee (2006) which examined the relationship between urban sprawl, traffic congestion and urban growth boundaries in the setting of Anas-Xu. The articles by Anas-Arnott (1997) describes an earlier application to the Chicago MSA housing market, of a developer model under conditions of perfect foresight dynamics.
In the next few weeks and months, working papers describing results from the empirical applications of the RELU-TRAN model to the Chicago MSA will be added to this website.
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Alex Anas and Yu Liu , "A Regional Economy, Land Use, and Transportation Model (RELU-TRAN): Formulation, Algorithm Design, and Testing," Journal of Regional Science (2007)
Alex Anas and Rong Xu, "Congestion, Land Use, and Job Dispersion: A General Equilibrium Model," Journal of Urban Economics(1999)
Alex Anas and Hyok-Joo Rhee,"Curbing Excess Sprawl with Congestion Tolls and Urban Boundaries," Regional Science and Urban Economics(2006)
Alex Anas and Ikki Kim, "General Equilibrium Models of Polycentric Urban Land Use with Endogenous Congestion and Job Agglomeration," Journal of Urban Economics
(1996)
Alex Anas and Richard Arnott, "Taxes and Allowances in a Dynamic Equilibrium Model of Urban Housing with a Size-Quality Hierarchy," Regional Science and Urban Economics (1997)