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TCRP H-12 Final Report 4~0 6`FUNCTIONAL DESIGN,, OF AN INTEGRATED URBAN MODEL 4.! Introduction Having built the case In Me preceding chapters for We need for integrated urban models, this chapter develops a general design of art 'ideal" integrated urban model. This is viewed as a critical step in the development of improved operational models for two reasons. First' the "ideal" model provides a consistent benchmark against existing models can be compared (Chapter 51. Second. it provides an explicit target towards which research and development (R&~) efforts can be directed (Chapter 69. The development of the ideal mode} design proceeds in several steps. Section 4.2 provides a high level overview ofthe ideal system. Section 4.3 defines a set of design issues which need to be addressed in turning this conceptual overview- into an operational model, while Section 4.4 discusses the closely associated issue of criteria for assessing a model's performance. Section 4.5 develops a more elaborated descup~on of the ideal mode] by addressing each of the design criteria developed in Section 4.2 in some detail. While far from an operational specification (something which is well beyond the scope of this project), the mode] description presented in Section 4.5 is sufficient for current purposes of assessing the current state of modeling practice and of defining a sensible R&D program in this area. 4.2 Overview of An Idealized, Integrated Modeling Process Figure 4. ~ presents a highly idealized representation of a comprehensive transportation land-use modeling system. The "behavioral core" of this system (shaded area of Figure 4.~) consists of four inter-relatec! components: [anct development: this models the evolution of the built environment, and includes both the initial development of previously "vacant" land and the redevelopment over time of existing land-uses. This component could also be labelled "building supply" since Bulldog StOCK Supply Actions (cons~ct1on, demolition, renovation. etc.) me included. , .,, ~ , , ~ . - . . . 2. Location choice: ibis includes the location choices of households (for residential dwellings), firms (for commercial locations), arid workers (for jobs). 3. Activi~y/traveZ~-hether performed by traditional four-stage methods or by emerging activit:~-based models, this component involves predicting the tup-making behavior of the population. ultimately expressed in terms of ongin-destination flows by mode by time of day. - 49

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TCR~ H-12 Final Report . Figure 4el Idealized Integrated Urban Modeling System Demographics ~1- ~ - ; . ~ Regional Economics ~ ~ :~ ~ ~ ~-~;~ - i. :: : -::: ~ ~ Government Policies 1 - ~ ~ If.: ~ : : : : : :: .. .. .. . Auto Ownership -, j Transport.System *- A ! . ~ ~ .. ~ ~ .... ~ .. ~ .. ... . . .... .. ~ ..... Land Use ~... : ~ .~ . . I. ~ .. ..... ... .. . .. - ' '~;:~ '1 . . ~ -:: ~ -; ' 1 : :: ~ .. . ~ -.:~ ~ ~1 2: it- ~ ~! e - ~ ~ ~ - .~ I. ~ ':::::':'2~'':1 ~ ~ ~::--1 Activity / Travel and .- ~ -I ~- (-J`,ods Movement ~ ~:~ :~ I: it: :: Location Choice ~. . -. .... - . - ~ ~ . ... ::: ;. . .. _~._ - _ _._ Flows, Times, etc. | | ExternalImpacts - sO

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TCRP H-12 Final Report Auto ownership: this component models household auto ownership levels -- an important dete~minar~t of household travel behavior. Points to note concerning these four "behavioral core" components include the following: In speaking about "land-use" it is common for transportation planners to blur the ist~nchons among these four components, especially between the concepts of 1~d development and location choice. A properly specified model, however, must clearly distinguish among these components since they involve very different actors. decision processes and timeframes. As is discussed further below- they also represent distinctly different "degrees of freedom" for the system to respond to exogenous inputs (such as construction of new transit infrastructure). Each component involves a complex set of sub-models. In particular, market-based supply-demand relationships tend to dominate aggregate behavior in each cased (buyers and sellers of houses interact within the housing market; workers and employers interact within the labor market; etc.), with prices) both being endogenously dete~nined and playing a major role in determining the outcome of these supply-demand interactions. Models which ignore these major supply-demar~d interactions may fall to properly capture the dynamical evolution of We urban system over tone. . . A simple flowchart such as Figure 4.] never properly captures the temporal complexities of a dynamic system. The vertical hierarchy is chosen to represent shorts conditioning effects. That is, In the short run, most location choices are made within a "fixed" building stock supply. Similarly, in the short run, most activity/~avel decisions are made given a "fixed" distnbution of activity locations (and a fixed number of household autos). In the longer run, all four components evolve' at least partially In response to "feedback" Tom lower levels in the hierarchy (land-use evolves in response to location needs of households and firms, people relocate Weir homes armor jobs at least partially in response to accessibility factors; etc.~. The inclusion of auto ownership as a separate box within the "behavioral core" is somewhat unconventional. Auto ownership is often treated as simply one more (ofren exogenously determined) input to We travel model. As Ben-Akiva tI 974] has 4 With the possible exception of the auto ownership component, although even here a "supply side" clearly exists, even if we usually choose not to model it explicitly. Or, in the case of trip-making, travel times - 31

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TCRT H-17 Final Report observed, however auto ownership is an integral part of the '"mobility bundle'' (which, in terms of Figure 4. I, Ben-Akiva would define as the combination of the location choice, auto ownership and activity/trave} components) in that it is fundamentally interconnected with residential location arid work trip commuting decision-making. This point is strongly reinforced within the empincal literature discussed in Chapter 3, in which auto ownership is consistently found to be art important "intermediate variables connecting urban form (as measured by residential density, etc.) and Ravel behavior (as measured by transit usage, VMT, etch As shown in Figure 4. I, there are at least four major "drivers" of urban systems: 1. Demographics: evolution of the resident population in terms of its age-sex distribution, population size, education level, etc.; 2. Regional economics: evolution of the urban region economy in terms of its size, industrial distribution, etc.; 3. Government policies: zoning, taxation, interest rates, etc.; and 4. The transportation system: road, transit' etc. The extent to which these venous drivers are treated as being exogenous or endoger~ous to the model will vary from one modeling system to another. Government policies and changes to the transportation system are almost exclusively treated as exogenous inputs; demographic and regional economic processes are almost always Heated as at least partially endogenous. The key point is that the full range of "drivers" of land-use/location/travel decision-making should be included in the modeling system to ensure that the impact of any one policy (such as a change in the transit system) can be properly represented and evaluated by the model. In particular, it was often the case with early land-use models that they over-emphasized transportation system effects on land-use/location processes and hence were biased towards over-predicting the impact of transportation system improvements on these processes. As Knight and Trygg [1977] clearly demonstrate. however, transportation improvements are only one among many determinants of land development decisions -(see Figure 3.39. It is fair to say that no existing transportation - lard-use model Filly captures all aspects of the comprehensive modeling system described above. Such a system, however, provides the starting point for assessing both the state of the practice and the state of the art in this field. It also defines the goal towards which all such modeling systems should be striving, in that such a system would provide the analytical means for assessing the short and long run impacts of both transit and road alternatives in a balanced and comprehensive way. In particular, the long run impacts of major improvements in transit access on land development, residential and employment location choice - 52

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TChP H-12 Final Report auto ownership levels and activity/travel could be assessed in a logical and defensible mater. It is also fair to say that, although not incompatible with a comprehensive transportation - land-use modeling process, TMIP is not actively developing such a process, despite the existence of the land-use Pack ("Track E"). Research to date within TMIP has focussed on act~vityl~ravel modeling (and associated emissions modeling), with the majority of the effort being placed on the development of the TRANSIMS network modeling system [Barrett' et al. ~ 1 995~. Figure 4. ~ can be expanded and reformulated ad infinitum. Figures 4.2 and 4.3 present two independently developed designs for "next generation" navel demand modeling systems which were generated as part of an FHWA "think piece" at the beginrung of the TMIP process. Without discussing these designs in detail, the key point to note is that land-use, location choice and demographics are all integral components of the proposed overall modeling systems. This inherent integration of land-use and transportation processes is further emphasized in Wegener's conceptualization of the process (Figure 4.4), in which he emphasizes the interactive, cyclical, feed- back nature of Me urban system. Cornrnenting on this figure, he notes: "The two-way interaction between land-use and transportation may be less commonplace for transportation modelers who are trained to take the land-use forecasts provided by planning departments as something beyond doubt. Now transportation planners, obliged to think about the land-use impacts of their proposals, call for land-use models as add-one to their ... models. Nothing could be more shortsighted. The land-use transportation feedback cycle needs to work its way through several iterations to equ~libnum or dynamic disequilibnum... The conclusion is that if transportation planners want larld-use forecasts, they have to integrate land- use models Into their models, or vice versa." [Wegener, ~ 99S, p. 27-28] Figure 4.5 provides one final representation of a transportation - land-use modeling system. The key point of this figure is to illustrate the potential sensitivity of such a system to a wide range of land-use and transportation policies. The figure shows a representative (although not necessarily ~ - 1 exhaustive) list of policies of interest. The arrows indicate the "entry points" for each of these policies within the modeling system, i.e., the point at which the given policy directly enters model calculations. For example, congestion pricing, gasoline taxes, etc. directly affect road user costs and so "enter" the modeling system at the road assignment stage, where these costs are calculated on a link by link and O-D pair by O-D pair basis, and where these costs presumably affect auto route choice decisions. The impact of such pricing policies, however, feeds back through the system, potentially affecting modal choices (and perhaps other aspects of travel choice), auto ownership, and possibly even residential and/or employment location choice. Thus, the modeling system, in principle, is capable of capturing both short- and long-run responses to a given policy (or combinations of policies) and, thereby, provide a more accurate estimate of system response, relative to more partial treatments of the problem.

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TCRP H-12 Final Report Figure 4.2 SAMS: Sequenced Activity-Mobil~ty System (Resource Decision Consultants, Inc., as reported in Spear ~19943) > ~ l ' PLANNING I PR( )CFRS ~;~~ \TDMs, , v ~ _ , ~ ~ , ~ /Command & Control . . ~ . ~ > 1 *Runs on GIS platform URBAN SYSTEM MICROSIMULATOR* I Land-use Re/development, price, densification Residential and Job Locations HIGHWAY/TRANSIT NETWORK SOCIO DEMOGRAPHIC MICRO SIMULATOR* Individuals Households Fi~ms/Developers t 11 - 1 1 '1 DYNAMIC HOUSEHOLD VEHICLE TRANSACTIONS MODULE ~ ~ T ~ ACTIVITY-BASED DAILY TRAVEL SIMULATOR* onginJdestination, time of day, mode vehicle allocation & vehicle occupancy I t DYNAMIC NETWORK ASSIGNMENT* Link flour by clock time Level of service Cold/hot starts . AIR QUALITY | EMISSIONS MODULE I 1 Indicators for Mobility, Air Quality & Value of Travel Services - 34

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TCRP H-12 Final Report Figllre 4.3 SMART: Simulation Mode} for Activities, Resources and Travel (Louisiana Transponahon Research Center, as reported in Spear t19943) - Land \~Prices - Site Schedules/ Constraints ~ ~'l' Land \~ Uses J :Infrastructure Investments by - >( Transpor~tion \` System ,J . .......... Linkage proposed Linkage suggested for later inclusion - Area ~ HH no; r ~ Characteristics J Needs/ ~ HH~ Activin- Pattern \~ Rind Constrain: - r M=datO~'~r Household Activity Simulator Routing Flexible ~l + - 1 Optlonal SpeedfConoestion ~ Net volumes by time of day ~ Net volumes by time of darer 1 ~ Net volumes by time of day 1 (E up by link)

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TCRP H-12 Final Report Figure 4.4 The Land-Use/Transportation Feedback Cycle Source: Wegener L1995] Mode choice He Route choice a/ / Firm loads / Travel times/ distance/costs 1 Accessibility Attractiveness - Location decisions of investors - Destination choice Transport Land Use - - - ~~ Construction - 56 Tnp decision \ Car ownership Activities Location decisions of users

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TCRP H-12 Final Report l Figure 4.5 Policy Inputs into an Integrated Urban Mode} Source: Miller and Hassour~ah t1993] ZoninglLand Use Policies e Interest Rates an. 9= Housing Policies Current Technology Changes ~ AdvancedlNew Technologies-_ . _ AVeh.Technology~AutoOwnershipt ~1 Inspection & Maintenance Programs ~ Vehicle Purchase Taxes A. Incentives for Scrapping"Bad" Cars Tax Policies Re. Auto Use DeductionsJ Carpooling Policies ' Parking Policies Telecommuting Policies Flexible Work Hours, etc. HOV Lanes Congestion Pricing ~ Traffic Control Measures ~ ~ ..~. Gasoline Taxes J ~ a..... Transit Improvements Transit Prionty Measures Transit User Subsidies J Employment Retail, etc. ==~_t Building Stock Residential Distributiont _ _ _ ~_ _ _ , .~'' ~ _ _ _ ~ 1 1 ., Non-Work Travel: _ _ Generation ~ . ~ by time of day e Distribution w /weekend - Mode Split | eekday Auto Driver Trips (by time of day) (+ auto occ.) Transit Tnps (by time of day) Walk/Bicycle Trips (by time of day) 41 . . .. ~ ~ ~ Auto Transit ! As s i Elm ent A s s i gem ent _ ~ _ , I _ _ - ~ r ~ ! Auto Energy Use Transit Energy & Emissions Use & Emissions ~, r I I t=t+^t - 57

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TCRP [I-17 Final Report - 4.3 Design Issues 4.3.! Introduction A large number of issues must be considered in the design of an operational integrated unbars mode} derived Mom the idealized modeling system presented In the previous sub-section. As many as possible of these are listed In Table 4. ~ and briefly discussed below. Different models, of course, wall address these issues In a variety of ways, ranging from ignoring them completely to dealing with them in a very computationally detailed and/or theoretically rigorous6 mariner. No "right' answer/approach necessarily exists with respect to any one of these issues. As with any design exercise, the "nght" or "best" design depends on the specific application context (data availability, computational and technical support capabilities, ar~alysis/forecasting needs, etc.~. In addition, no one issue or "dimension" of the problem can be "optimized" in isolation; it is the overall balance across design dimensions which is impor~t (e.~., very fine spatial resolutions may be difficult/~mpossible/ur necessary to m~nta~n within very Tong-range forecasting applications). The intention here, rather, is simply to generate a reasonably comprehensive list of issues, as a framework for organizing =d discussing the modeling state-of-the-artlpractice in Chapter 5. In addition, they provide the basis for the development of model evaluation criteria, discussed in Section 4.4. , c The identified design issues have been grouped in Table 4.l into five categories: physical system representation, representation of "active agents" in the system, representation of processes, "generic" issues (which cut across virtually- all physical system, active agent and process representation considerations)' and issues associated with the implementation of the model design within an actual computational environment. The first three categories deal with the substance of We system being modeled: the physical entities. Me behavioral entities, and the processes by which these physical and behavioral entities evolve over time. The last two categories are more methodological in nature. dealing with how the representation of these entities and processes is actually implemented within an operational modeling system. Each of these groups of issues are cliscussed in turn in the following sub-sections. 4.3.2 Physical System Representation Fundamental to model design are decisions concerning the representation of the physical elements of ~e system: time, land (space), buildings and transportation networks. These decisions fundamentally affect the precision and accuracy of the models its data and computational requirements, arid options for the representation of behavior within the physical urban system. 6 Note that these need not be the same thing! Theoretically crude approaches may well be very computationally intensive, with all other combinations oftheoretical elegance and computational requirements potentially existin, as well. - :8

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TChP H-17 Final Report 1 1 Table 4.l Integrated Urban Mode} Design Issues Physical System Representation O Time O Space (land) O Building stock O Transportation networks O Services Representation of Decision Makers O Persons o Households Private firms O Public authorities Representation of Processes o Land development O Location choices o Job market O Demographics O Regional economics O Automobile holdings o Activity/trave} demand 0 Network performance "Generic Issues" O Level of aggregation/disaggregation 0 Endogenous versus exogenous treatment 0 Level of "process type" O Model specification Implementation Issues Dam requirements Computational requirements ,9

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TCRP H-12 Final Report . . . As currently envisioned, even an "ideal" mode] would probably have very limited representation of these services. At a minimum a simple "serviced/not serviced" flax may well prove adequate. The architecture of the mode] software, however. should be extensible to include a broader arid more detailed representation of services as time. opportunity and need rams. 4.5.3.3 Representation of Decision-Makers There are four fundamental decision-makers in urban areas: persons, households, private ferns, and public authorities (government and other public agencies). All four tripes of decis~on- makers must be explicitly represented in the model. While there is obviously a strong "mapping" back and forth between persons and the households within which they live, both representations are required within the model. Individuals are born, age arid eventually die. They go to school work at jobs etc. Households. on the other hand, are the appropriate decision-making units for residential location decisions automobile transaction decisions, and for providing Me framework for understar~din~ the activity/travel patterns of individual tr~p-makers. Private florins provide the majority ofthe "economic energy" feeling urban processes. They occupy land arid buildings, they demand and supply goods and services they employ workers. Trio tripes of few which are of particular Interest within the model are developers (whose business it is to develop land and construct buildings) and transportation firms (whose business it is to provide transportation services to themselves and/or others). Much of the behavior of public authorities lies outside the domain ofthe mode} per se in that it represents the political and bureaucratic processes of public policy debate and decision-making, the outcomes of which become exogenous inputs to the model. In addition however, public authorities are typically major employers arid consumers (and providers) of land, floor space, transportation and other goods and services within urban areas and so have endo~enous roles to play within the mode] as well. Thus, it is import within the conceptualization of the model structure to recognize the role of public authorities within urban areas, both as "exogenous drivers" of the urban system, as well as endo~enous participants in the urban community's daily life. Table 4.4 presents a representative list of possible attributes of persons. households, firms and public authorities which might be included in an ideal model. In this table "utility" simply is short-hand for whatever measures of person and household "satisfaction", "well-being", etc., are being used within the mode] (discussed farther below). - 82

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TCRP H-12 Final Report Table 4.4 Decision-Maker Attributes ~ : ~Actors i: Aft: ~ | ~ ::: : Attributes ~l Persons Quality of life: - utility being achieved - travel {consistent with actrri~-based travels Work . Over - place (location) utility - other consumption / activity - total utility': ~ Gavel, place. other utilities Age Sex Driver's licence Mobility restrictions Income Awake plus other; also taxes) Household role Employment (related attributes;: - potential occupations - current employment status: - not in labor force - unemployed - employed: -part time/fulltime - occupation - job location - u age (and taxes) Education related attributes - highest level of schooling attained - current educational status: - not a student - part time / fills time - level - location - 8:

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TCRP H-12 Final Report Table 4.4 Decision-Maker Attributes i: Actors -I ~ : :- i: ~ : ~ Attributes : ~ ~ ~ :: ~ ~ ~: --it ~ : .. . Households Dwelling unit - location - attributes - property taxes Tenure Household utilities = ~ person utilities Vehicle availability - number -type Life cycle point of Be household (e.~., defined by number of children etc.; will influence place / travel / other utilities) Private Establishment Industry type fi.e., a f rm, or a unit of Finances thatfirm, that has a - gross revenues unique location. (NB: - gross costs (occupancy costs; including taxes, carriers and developers especially property taxes) fit within this framework, Inputs but are Two categories - capital that have special roles / - number of jobs by occupation type impacts in this model. - other roods and services (commodities, etc.) Although these may be - space (location) publicly-owned, they tend Outputs (goods, services and infrastructure) lo behave lilts private Own-account shipping (yes / no): establishments.)y - If yes: - mode - fleet size Public Authorities fit e., Industry type according to unique Finances functional location) - revenues - costs Inputs - capital - number jobs by occupation type - other goods and services Commodities etc.) - space (location) Outputs (goods, services and infrastructure) Own-account shipping (yes / no): - If yes: - mode - fleet size - 84

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TCRP H-17 Final Report - In the market framework to be descnbed fur~er below, each of these four actors generally has several roles; sometimes as a producer or supplier of goods and services, and sometimes as a consumer or dem=der of these goods and services. For example, persons supply labor to firms, who "consume" this labor. Retail fimns produce retail goods which are consumed by shoppers. Retailers, in turret, are demanders of these same goods from wholesalers. And so on. Table 4.5 illustrates some of the key production/consumption roles played by the four actor types with respect to key sectors within the mode] (transportation, floor space and other goods and services). 4.~.3.4 Representation of Decision Processes Market Processes. As outlined in Axioms 4 and i, a fundamental org~z~ng pnnciple for urban areas is the market within which goods. services. =d money are exchanged between producers and consumers. Prices for these goods and services are detennined through the market interaction; these prices, In turn, determine the level arid nature of the exchanges Cat occur within the market between supplier and demander. Without explicit representation of the demand and supply processes at work within urban markets-- and of the price signals which mediate between demand and supply -- it simply is not possible to mode! adequately the outcomes from these markets. Table 4.6 lists the key markets at work within urban systems along with the demanders and suppliers in each case. As is clear Tom this table, market processes determine virtually every element of interest within the land-use - transportation system, Including land development. location choice processes, travel, and automobile ownership. As has already been discussed, individual actors (persons, firms, etc.) participate in these markets in complex ways, sometimes as producers and sometimes as consumers. Development of an "ideal" model involves the explicit specification of demand and supply processes for each of the markets listed in Table 4.6. While beyond the scope or capabilities of this current study, this specification involves Get ring for each process the actorks) involved, the specific decisions which they must make, the attributes of the actors which are salient to their decision- making process, the attributes of the alternatives and the decision context which affect the decision, and the "market clearing" mechanism by which demanders and suppliers interacts ultimately resulting in the determination of prices and the exchange of goods and services. Central to the development of these models is the issue of actor motivations, which is discussed briefly next. - 8:

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TCRP H-12 Final Report Table 4.6 Markets in the Urban System .... -I . - ~ - . I. ~ ~ . . . . ; . .. . - ~ . .. .. -:~: --Market :::- ~ :::: --I :- -:~::Demanders : :~ : -:: Suppliers Housing Market Household Public authorities Developers Household Floor Space Market ~Firms Developers Public authorities Firms Goods and Services ~ Persons Firms Market (includes Households Public authorities education) Firms Public authorities Job Market Firms Persons Public authorities Personal Transportation Persons Persons Market Households Firms Public authorities _ Goods Movement Market Persons Persons Firms Households Public authorities Firms (couriers etc.) _ Inhas~ucture Market Persons Public authorities Households Firms Firms (couriers, etc.) Public authorities _ Auto (Vehicle) Market* Households Firms CAB: exogenous) Firms . Public authorities * Interest is primarily in the personal vehicles. Motivational Frameworks. In order to model actor decision processes in either a supply or a demand context' one must have some understanding of the motivations driving the actor ~ question. For persons and households, we believe it is reasonable to assume that this motivation is the maximization of the "joint utility" of household members, subject to income, time and capability constraints. At this level of the conceptualization, "utility" is used in a very loose sense of "well- being" and does Ilot necessarily imply any particular modeling paradigm (e.g., random utility theory). - 87

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TCRP H-12 Final Report - Rather it simply represents the very basic assumption that we derive utilit~- fi:om (i.e.. we need) . .. . .. ~ . . .. . . . . . . . . . . . .. ~ ~ . . .. . sheller arid security tarlc so enter me nousm, market in order to obtain shelter). loon. clothing, etc. (and so enter the retail market to obtain these goods), and so on. ~ order to obtain these things within a market economy we need money, which we usually obtain by entering Me labor market and selling our labor skills and knowledge for wages. Further, we need access to opportunities (jobs, education, shopping, etc.) and so enter travel markets in order to gain physical access to the jobs, schools, goods, services' etc. which we need and want. Thus. persons arid their associated households enter various markets as demanders (housing, goods, services) or suppliers (labor. resale housing): first, to achieve their basic needs, then to maximize their personal well-be~ng or utility. Firms similarly can be assumed to be motivated by the desire to survive and prosper' where "prospering" might be measured in a number of different ways (net revenue, reman on investment, growth rate, etc.~. Regardless of the measurers) used, in order to survive, the fig must obtain revenue from the production and sale of goods and/or services In response to either an existing demand or anticipated (latent) demand; thus the final becomes active as a supplier in the market for .. . . ~ . . .. . .. ~ . . . . . . these goods or services. in order to Produce these goods the firm requires various inputs ( arid hence is a demander of): labor, space, capital. and other physical Inputs. l he process of producing and selling the goods/services also generates flows of goods tofDom the point of production. as well as flows of business travel, thereby making the firm a demander (and sometime supplier) of transportation services. Finally, it is assumed that the motivation of public authorities is to maximize social welfare, subject to societal budget, time and cacabili~v constraints. recoan~z~n~ that auantifvin~ this concept . .. it, .. . .. d. - 4 ~ ~ , _ ~ may be very o~cu~t In practice. In order to maximize (or at least to improve) social welfare, public authorities often directly enter markets as suppliers of services and/or infrastructure, open in situations in which private forms will not enter due to a perceived lack of profits. In addition, public authorities seek to guide markets towards socially beneficial states through a variety of policies, such as: provision of subsidies. taxation, income redis~bution~5 and regulation. In order to accomplish these tasks, public authorities (just like private firms) enter markets to demand labor, space, goods and services, and transportation. Demographics. While implicitly shown as an exogenous "driver" of the urban system in Figure 4. I, demographic processes are. in fact, an integral part of Me urban system and its internal dynamics. Births, deaths aging, household formation/evolution/dissolution are fundamental processes determining the characteristics of the population arid thereby the demand for housing, education, jobs, goods and services, etc. Much of the explanatory power of disaggregate models of human i5 This is somewhat redundant, since income redistribution is generally achieved through some combination of subsidy and taxation. Subsidies and taxation, however, can be used for other purposes than income redistribution (hence the distinction, for the purposes of this work). - 88

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TCRP H-19 Final Report decision-making comes from being able to specify the atinbutes of the individuals involved, and hence to be able to say something with reasonable confidence about their tastes and preferences, etc. If such disaggregate decision models are to be employed effectively, then the overall modeling system must be able to supply these decision models with the required decision-maker attributes. As a result, a central and significant component of an ideal integrated modeling system is a strong, endogenous, dynamic model of person and household demographics. This includes both the capability to synthesize (if need be) the attributes of individuals and households in the base (initial) system state, and to "update" or "evolve" these attributes over time within the overall simulation run. Regional Economics. This relates to Me overall regional economic system within which individual firms operate and compete, arid which determines the overall flow- of goods and services both internally within the urban area and into/out of the urban area as import/export flows between the urban area and the "outside world." Some regional economic factors/processes are exogenous to the urban area and so to the model. such as interest rates, inflation, national immigration policy, and perhaps total production levels by industrial sector. Other aspects are endogenous. In current models, this component, if present, is usually handled through some form of input/output model, and this is the most likely approach for models to maintain for some time to come. 4.5.4 Summary Table 4.7 provides a brief summary of the attributes of the ideal integrated urban model discussed above. These attributes are grouped according to the three main categories defined in Table 4.1: physical system, decision makers and processes. Land development, location choice processes, and job-worker linkages are all modeled as economic markets with explicit supply and demand functions and procedures for price determination and "market clearing" (i.e., the allocation of supply to demand). The model is envisioned to be dynamic, disaggregate and behaviorally sound. As such, it will be sensitive to a wide range of land-use and transportation policies and able to trace the direct arid indirect impacts of any of these policies through time and space. No attempt has been made to specify; detailed formulations of individual sub-models within the overall modeling system. Many options typically exist here, and much research is required in order to translate this very general model into operational practice. Similarly, no attempt is made here to address the data and computational requirements of such a model, except to note that such a modeling system is almost certainly not beyond our current and emerging capabilities [Miller and Salvini, 1998]. - 89

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TCRP H-12 Final Report Table 4.7 SuTr~nary of Ideal Integrated Mode! Attributes PHYSICAL SYSTEM Torte: Dynamic evolution of the system state In one-year time steps. System state generally not in equilibrium. Interactions between long-run and short-run processes are ';properly" accounted for. Land: The basic unit of land is the individual lot. Building Stock: Building stock is explicitly represented. Each lot has a certain amount of floor space, characterized by type, price, etc. Transportation Networks: Full, multimodal representation of the transportation system used to move both people and goods. Sufficient spatial and temporal detail to properly mode! flows, network performance, emissions, etc. Ideally, a twency-four hour network mode} to be used. Services: Sufficient representation of other services for the purpose of modeling land development decisions. DECISION MAKERS Persons and Households: Both persons and households are explicitly maintained (with appropriate "mappings" between the two entities) in sufficient detail to mode! the various processes of interest. Firms: Explicitly represented. Firms at least as important as households in the overall system: they occupy land / floor space; they employ workers; and they buy / sell goods and services from / to themselves and households. Firms are modeled in sufficient detail to capture adequately their behavior within these various roles. Public Authorities: Represented within the mode! to the extent they generate purely endogenous effects (employers of workers, demander / supplier of services; etc.~. Will remain represented largely by exogenous inputs to the model. - 90

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TChP H-12 Final Report Table 4.7 Summary of Ideal Integrated Mode! Attributes, cont'd PROCESSES Markets: Land development, residential housing, commercial floor space and labor all function within economic markets which possess demand and supply components and price signals which mediate between demand and supply. These economic markets must be explicitly modeled if them behavior over the is to be captured properly. Demographics: Demographic processes should be modeled endogenously so as to ensure that the distribution of population attributes (personal and household) are representative at each point of time being modeled and are sufficiently detailed to support the behavioral decision models being used. Regional Economics: Essential components of urban production / consumption processes should be modeled endogenously. The mode} should also be sensitive to macro exogenous factors such as interest rates, national migration policies, etc. Activity / Travel: The Gavel demand component of He integrated mode] should be activity- based and sufficiently disaggre~ated so as to properly capture trip-makers' responses to a full range of transportation policies, including ITS and TDM. Automobile Holdings: Household auto holdings (number of vehicles, by type) should be endogenously determined within the model. 91

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