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Description

The Rural Alaska Model (RAM Model) was developed by the Institute of Social and Economic Research for use in projecting population and employment impacts of Outer Continental Shelf (OCS) petroleum development on rural Alaskan communities. This study examines the sensitivity of the RAM model's projections to a variety of input assumptions. The study results provide and indication of the kinds of uncertainties associated with the model's projections as well as a feel for which assumptions are relatively more significant as sources of uncertainty. The study results provide a starting point for planned review and revisions of the RAM model. Because the RAM model assumes that population is closely related to employment opportunities in many rural Alaska communities, those assumptions which directly affect projected employment strongly affect the level of projected population. Among these are assumptions about exogenous employment, support and government employment multiplier, and the trends in levels of local government employment as they are affected by future state government expenditures and revenues. Assumptions about migration are also highly important for RAM model base case projections. At present, the RAM model allows for a wide range of assumptions about the degree of migration induced by increases or decreases in employment opportunities and the level of annual turnover in population independent of changes in employment opportunities. Our sensitivity tests indicate that unless a high degree of annual turnover in population is assumed, the RAM model tends to "over adjust" population in response to changes in employment demand, causing projected population to cycle. We plan to address this problem in future revisions of the model. Most of the assumptions of the RAM model appear to affect the base case and impact case projections in similar ways. As a result, even when the model's base case projections are highly sensitive to model assumptions, the projected impacts of OCS sales (the difference between the impact case the base case) tend to be considerably less sensitive to model assumptions. In effect, we may be able to make relatively accurate projections about the effects of OCS development even when we are quite uncertain about other changes which may take place in the community-- especially when the scale of projected OCS development is relatively small.

Publication Date

10-13-1984

Keywords

RAM Model, OCS, Outer Continental Shelf, Data

Handle

http://hdl.handle.net/11122/14167

Sensitivity of Ram Model Projections to Key Assumptions

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