A macroeconomic analysis of regional environmental modeling and planning

Alterations in the institutional structure of a region through exogenous investment can be viewed as a tool for regional adjustments in environmental quality. Two models are presented: an expanded Metzler interregional model that incorporates regional disamenities into the multiplier structure and a regional migration model for estimating regional disamenities. The underlying suggestion of the regional environmental trade model is that a concept of aggregate efficiency should be established for the allocation of large exogenous investment expenditures across regions. An example estimation is presented for the Southwest. Revised regional multipliers that include disamenity levels are calculated and the investment decisions with and without disamenity effects are considered. The example estimations suggest that failure to include disamenity corrections in regional multipliers will lead to greater regional inequality in welfare.