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Modeling Geographic Ferrous Scrap Markets: Regional Prices and Interregional Transactions in the United States

The "U.S. Regional Ferrous Scrap Model" analyzes spatial variations in prices for two grades of ferrous scrap using a logistic model of choice under differentiated products. The model uses a computer-generated equilibrium framework to solve for prices that support the observed spatial distribution of supply and demand quantities. This paper presents the model's formal structure and its solution algorithm. The model specification is highly disaggregated with 1,212 supply and 240 demand regions. Characteristics of the equilibrium solution are described for prices and interregional flows. Sensitivity of equilibrium values to changes in model parameters is reported. Copyright Blackwell Publishing Inc. 2005