Geographical Simulation Modeling for evaluating logistics infrastructure: A model for the ASEAN Economic Community

Geographical Simulation Model (GSM) is an alternative decision support system to assess transportation, agglomeration, as well as economic growth behaviour according to logistics infrastructure improvement and development. This simulation model is based on spatial economics and includes seven economic sectors, including manufacturing and non- manufacturing. Traditional impact assessment methods like Computable General Equilibrium (CGE) model are often subject to limitations when providing analyses at the sub-national level. The available routes of highways, railways, and sea and air shipment are incorporated in the GSM model. The transaction cost within regions is modelled as determined by firms´choice to choose the course with the lowest trade costs. It also includes the estimates of some border cost measures such as tariff rates, non-tariff barriers, other border costs, etc. Enhancing ASEAN (the Association of Southeast Asian Nations) Economic Community by improving its infrastructure is used to demonstrate the GSM framework as a decision support system.