On linking microsimulation and computable general equilibrium models using exact aggregation of heterogeneous discrete-choice making agents
Our paper contributes by bridging the gap between the (partial equilibrium) microsimulation and the computable general equilibrium (CGE) approaches, by making use of exact aggregation results from the discrete choice literature: heterogeneous individuals choosing within a set of discrete alternatives may be aggregated into a representative agent with (possibly multiple-level) constant elasticity-of-substitution/transformation preferences/technologies. These results therefore provide a natural link between the two policy evaluation approaches. We illustrate the usefulness of these results by evaluating potential effects of population ageing on the dynamics of income distribution and inequalities, using a simple overlapping generations model where individuals make leisure/work decisions, and choose a profession among a discrete set of alternatives.
|Date of creation:||2009|
|Publication status:||Published in Economic Modelling, Elsevier, 2009, 26 (3), pp.560-570|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00627736|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Zvi Eckstein & Kenneth I. Wolpin, 1989. "The Specification and Estimation of Dynamic Stochastic Discrete Choice Models: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 24(4), pages 562-598.
- Sebastian Rausch & Thomas Rutherford, 2010.
"Computation of Equilibria in OLG Models with Many Heterogeneous Households,"
Springer;Society for Computational Economics, vol. 36(2), pages 171-189, August.
- Sebastian Rausch & Thomas F. Rutherford, 2008. "Computation of Equilibria in OLGModels with Many Heterogeneous Households," CER-ETH Economics working paper series 08/90, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
- Rausch, Sebastian & Rutherford, Thomas F., 2007. "Computation of Equilibria in OLG Models with Many Heterogeneous Households," Ruhr Economic Papers 15, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
- François Bourguignon & Amedeo Spadaro, 2006.
"Microsimulation as a Tool for Evaluating Redistribution Policies,"
20, ECINEQ, Society for the Study of Economic Inequality.
- François Bourguignon & Amedeo Spadaro, 2006. "Microsimulation as a tool for evaluating redistribution policies," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 4(1), pages 77-106, April.
- Amadéo Spadaro & François Bourguignon, 2006. "Microsimulation as a Tool for Evaluating Redistribution Policies," Post-Print halshs-00754162, HAL.
- François Bourguignon & Amadéo Spadaro, 2005. "Microsimulation as a tool for evaluating redistribution policies," PSE Working Papers halshs-00590863, HAL.
- Arntz, Melanie & Boeters, Stefan & Gürtzgen, Nicole, 2005.
"Alternative Approaches to Discrete Working Time Choice in an AGE Framework,"
ZEW Discussion Papers
05-62, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Arntz, Melanie & Boeters, Stefan & Gurtzgen, Nicole, 2006. "Alternative approaches to discrete working time choice in an AGE framework," Economic Modelling, Elsevier, vol. 23(6), pages 1008-1032, December.
- Arntz, Melanie & Boeters, Stefan & Gürtzgen, Nicole & Schubert, Stefanie, 2006.
"Analysing welfare reform in a microsimulation-AGE model: the value of disaggregation,"
ZEW Discussion Papers
06-76, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Arntz, Melanie & Boeters, Stefan & Gürtzgen, Nicole & Schubert, Stefanie, 2008. "Analysing welfare reform in a microsimulation-AGE model: The value of disaggregation," Economic Modelling, Elsevier, vol. 25(3), pages 422-439, May.
- Train,Kenneth E., 2009.
"Discrete Choice Methods with Simulation,"
Cambridge University Press, number 9780521766555, December.
- Luc Savard, 2003. "Poverty and Income Distribution in a CGE-Household Micro-Simulation Model: Top-Down/Bottom Up Approach," Cahiers de recherche 0343, CIRPEE.
- Fougere, Maxime & Mercenier, Jean & Merette, Marcel, 2007. "A sectoral and occupational analysis of population ageing in Canada using a dynamic CGE overlapping generations model," Economic Modelling, Elsevier, vol. 24(4), pages 690-711, July.
- Zvi Eckstein & Kenneth I. Wolpin, 1989. "Dynamic Labour Force Participation of Married Women and Endogenous Work Experience," Review of Economic Studies, Oxford University Press, vol. 56(3), pages 375-390.
When requesting a correction, please mention this item's handle: RePEc:hal:journl:halshs-00627736. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If references are entirely missing, you can add them using this form.