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Modeling Individuals' Behavior: Evaluation of a Policymaker's Tool

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  • Alan L. Gustman

Abstract

With a continuous decline in the cost of manipulating data and a continuous increase in the richness of data banks, policymakers have increasing opportunities to build and apply so-called micro-simulation models--modelsthat attempt to simulate the behavior of the individuals in a large population under a specified program. The efforts of the Department of Labor to use a model in evaluating proposed changes in the unemployment insurance system point up both the power and the weaknesses of such models. Any user who applies these models without attempting to understand which of their strengths and weaknesses are most important for analyzing the problem at hand is asking for trouble. Easy to use or not,these models are not user friendly.

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File URL: http://www.nber.org/papers/w1223.pdf
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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1223.

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Date of creation: Oct 1983
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Publication status: published as Gustman, Alan L. "Modeling Individuals' Behavior: Evaluation of a Policymaker's Tool." Journal of Policy Analysis and Management, Vol. 3, No. 2, (Winter 1984), pp. 191-205.
Handle: RePEc:nbr:nberwo:1223

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Cited by:
  1. Gustman, Alan L & Steinmeier, Thomas L, 1986. "A Disaggregated, Structural Analysis of Retirement by Race, Difficulty of Work and Health," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 509-13, August.

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