Social Modelling and Public Policy: Application of Microsimulation Modelling in Australia
This paper provides an overview of social modelling and in particular a general introduction to and insight into the potential role and usefulness of micro-simulation in contributing to public policy. Despite having made a major contribution to the development of tax and cash transfer policies, there are many important areas of government policy to which microsimulation has not yet been applied or only slow progress has been made. The paper starts with a brief review of some of the main distinguishing characteristics of social models. This provides a contextual background to the main discussion on recent microsimulation modelling developments at the National Centre for Social and Economic Modelling (NATSEM) in Canberra, Australia, and how these models are being used to inform social and economic policy in Australia. Examples include: NATSEMâ€™s static tax and cash transfer model (STINMOD); modelling the Australian Pharmaceutical Benefits Scheme; application of dynamic modelling for assessing future superannuation and retirement incomes; and the development of a regional microsimulation model (SYNAGI). Various technical aspects of the modelling are highlighted in order to illustrate how these types of socio-economic models are constructed and implemented. The key to effective social modelling is to recognise what type of model is required for a given task and to build a model that will meet the purposes for which it is intended. The potential of microsimulation models in the social security, welfare and health fields is very significant. However, it is important to recognise that policy decisions are going to involve value judgements - policies are created and implemented within a political environment. The aim is for social modelling, and in particular policy simulations, to contribute to a more rational analysis and informed debate. In this context, microsimulation models can make a significant contribution to the evaluation and implementation of â€˜just and fairâ€™ public policy.
Volume (Year): 5 (2002)
Issue (Month): 4 ()
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