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Sensitivity of Simulation Results to Competing SAM Updates

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  • M. Alejandro Cardenete
  • Ferran Sancho

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Abstract

Recently there has been a renewed research interest in the properties of non survey updates of input-output tables and social accounting matrices (SAM). Along with the venerable and well known scaling RAS method, several alternative new procedures related to entropy minimization and other metrics have been suggested, tested and used in the literature. Whether these procedures will eventually substitute or merely complement the RAS approach is still an open question without a definite answer. The performance of many of the updating procedures has been tested using some kind of proximity or closeness measure to a reference input-output table or SAM. The first goal of this paper, in contrast, is the proposal of checking the operational performance of updating mechanisms by way of comparing the simulation results that ensue from adopting alternative databases for calibration of a reference applied general equilibrium model. The second goal is to introduce a new updatin! g procedure based on information retrieval principles. This new procedure is then compared as far as performance is concerned to two well-known updating approaches: RAS and cross-entropy. The rationale for the suggested cross validation is that the driving force for having more up to date databases is to be able to conduct more current, and hopefully more credible, policy analyses.

Suggested Citation

  • M. Alejandro Cardenete & Ferran Sancho, 2002. "Sensitivity of Simulation Results to Competing SAM Updates," UFAE and IAE Working Papers 556.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  • Handle: RePEc:aub:autbar:556.02
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    References listed on IDEAS

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    1. Robinson, Sherman & Cattaneo, Andrea & El-Said, Moataz, 1998. "Estimating a social accounting matrix using cross entropy methods:," TMD discussion papers 33, International Food Policy Research Institute (IFPRI).
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    3. N/A, 1985. "General Policy," India Quarterly: A Journal of International Affairs, , vol. 41(1), pages 74-79, January.
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    5. Ballard, Charles L. & Fullerton, Don & Shoven, John B. & Whalley, John, 2009. "A General Equilibrium Model for Tax Policy Evaluation," National Bureau of Economic Research Books, University of Chicago Press, edition 0, number 9780226036335, May.
    6. Sherman Robinson & Andrea Cattaneo & Moataz El-Said, 2001. "Updating and Estimating a Social Accounting Matrix Using Cross Entropy Methods," Economic Systems Research, Taylor & Francis Journals, vol. 13(1), pages 47-64.
    7. Charles L. Ballard & Don Fullerton & John B. Shoven & John Whalley, 1985. "Introduction to "A General Equilibrium Model for Tax Policy Evaluation"," NBER Chapters,in: A General Equilibrium Model for Tax Policy Evaluation, pages 1-5 National Bureau of Economic Research, Inc.
    8. Kehoe, Timothy J. & Whalley, John, 1985. "Uniqueness of equilibrium in large-scale numerical general equilibrium models," Journal of Public Economics, Elsevier, vol. 28(2), pages 247-254, November.
    9. McDougall, Robert, 1999. "Entropy Theory and RAS are Friends," GTAP Working Papers 300, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
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    Citations

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    Cited by:

    1. M. Alejandro CARDENETE & M. Carmen LIMA, "undated". "Multiplier Decomposition Within Regional SAMs: the Case of Andalusia," EcoMod2004 330600033, EcoMod.
    2. Sancho, Ferran, 2010. "Double dividend effectiveness of energy tax policies and the elasticity of substitution: A CGE appraisal," Energy Policy, Elsevier, vol. 38(6), pages 2927-2933, June.
    3. M. Carmen Lima Díaz & Manuel Alejandro Cardenete Flores & José Vallés Ferrer, 2003. "Structural Path Analysis: Applications to Structural Changes in the Andalusian economy (1990-1999)," ERSA conference papers ersa03p109, European Regional Science Association.
    4. M. Carmen Lima Díaz & M. Alejandro Cardenete Flores, 2007. "A price model to assess the inflationary effects of the European Regional Policy," Working Papers 07.15, Universidad Pablo de Olavide, Department of Economics.
    5. Lima , M.Carmen & Cardenete, M.Alejandro & Hewings , G.J.D. & Vallés Ferrer, José, 2004. "A structural analysis of a regional economy using Social Accounting Matrices:1990-1999," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 5, pages 113-138.
    6. M. Carmen Lima & M. Alejandro Cardenete & José Vallés, 2003. "Un análisis estructural de la economía andaluza a través de matrices de contabilidad social: 1990-19991," Economic Working Papers at Centro de Estudios Andaluces E2003/20, Centro de Estudios Andaluces.

    More about this item

    Keywords

    Social Accounting Matrices; Model Evaluation; Applied General Equilibrium; Non-survey Updating Techniques;

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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