Sectoral models

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These models are constructed on the equilibrium of one specific sector of the economy.

The strength of sectoral models is that they focus only on one economic sector and thus enable a relatively high degree of disaggregation and a detailed representation of the specific economic and institutional factors. Partial models are an appropriate tool if the focus of policy analysis is on a specific sector (e.g. transport) and if feedbacks between the rest of the economy (e.g. via substitution and demand effects) can be ignored to a large extent. Note that the importance of these indirect feedback effects increases with the degree of regulative intensity. Sectoral models are often very detailed since they are sometimes complemented by more specific (e.g., engineering-economic) bottom-up models. The latter are advantageous since they, for example, are able to handle nonlinearities.

The most important drawback of sectoral models is their incapacity to capture the effects on other markets and the feedbacks into the specific market under consideration.[1]

Examples of EU funded sectoral models:


  1. 1.0 1.1 JRC European Commission, IA Tools, supporting impact assessement in the European Commission [1].