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SBAM: An algorithm for pair matching

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  • Stephensen, Peter
  • Markeprand, Tobias

Abstract

This paper introduces a new algorithm for pair matching. The method is called SBAM (Sparse Biproportionate Adjustment Matching) and can be characterized as either cross-entropy minimizing or matrix balancing. This implies that we use information efficiently according to the historic observations on pair matching. The advantage of the method is its efficient use of information and its reduced computational requirements. We compare the resulting matching pattern with the harmonic and ChooSiow matching functions and find that in important cases the SBAM and ChooSiow method change the couples pattern n in the same way. We also compare the computational requirements of the SBAM with alternative methods used in microsimulation models. The method is demonstrated in the context of a new Danish microsimulation model that has been used for forecasting the housing demand.

Suggested Citation

  • Stephensen, Peter & Markeprand, Tobias, 2013. "SBAM: An algorithm for pair matching," MPRA Paper 59580, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:59580
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    References listed on IDEAS

    as
    1. Eugene Choo & Aloysius Siow, 2006. "Who Marries Whom and Why," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 175-201, February.
    2. McDougall, Robert A., 1999. "Entropy Theory and RAS are Friends," Working papers 283439, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Michael H. Schneider & Stavros A. Zenios, 1990. "A Comparative Study of Algorithms for Matrix Balancing," Operations Research, INFORMS, vol. 38(3), pages 439-455, June.
    4. 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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    Cited by:

    1. Peter Stephensen, 2013. "The Danish Microsimulation Model SMILE – An overview," DREAM Working Paper Series 201305, Danish Rational Economic Agents Model, DREAM.
    2. Jonas Zangenberg Hansen & Peter Stephensen, 2013. "Modeling Household Formation and Housing Demand in Denmark using the Dynamic Microsimulation Model SMILE," DREAM Working Paper Series 201304, Danish Rational Economic Agents Model, DREAM.
    3. Jonas Zangenberg Hansen & Peter Stephensen & Joachim Borg Kristensen, 2013. "Household Formation and Housing Demand Forecasts," DREAM Working Paper Series 201308, Danish Rational Economic Agents Model, DREAM.

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    More about this item

    Keywords

    matching microsimulation;

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling

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