Editor/s:
Eric A. Hanushek, Constance F. Citro
Published Date:
1991
Publication:
Washington, DC: National Academy Press
Pages:
360 pages
This book reviews the uses and abuses of microsimulation models - large, complex models that produce estimates of the effects on program costs and who would gain and who would lose from proposed changes in government policies ranging from health care to welfare to taxes. Volume 1 is designed to guide future investment in modeling and analysis capability on the part of government agencies that produce policy estimates. It will inform congressional and executive decision makers about the strengths and weaknesses of models and estimates and will interest social scientists in the potential of microsimulation techniques for basic and applied research as well as policy uses. The book concludes that a "second revolution" is needed to improve the quality of microsimulation and other policy analysis models and the estimates they produce, with a special emphasis on systematic validation of models and communication of validation results to decision makers.
PANEL TO EVALUATE MICROSIMULATION MODELS FOR SOCIAL WELFARE PROGRAMS
- ERIC A. HANUSHEK (Chair), Department of Economics, University of Rochester
- DAVID M. BETSON, Department of Economics, University of Notre Dame
- LYNNE BILLARD, Department of Statistics, University of Georgia
- SHELDON DANZIGER, Institute of Public Policy Studies, University of Michigan
- EUGENE P. ERICKSEN, Department of Sociology, Temple University
- THOMAS J. ESPENSHADE, Office of Population Research, Princeton University
- HARVEY GALPER, KPMG Peat Marwick, Washington, D.C.
- LOUIS GORDON, Department of Mathematics, University of Southem Califomia
- KEVIN M. HOLLENBECK, W.E. Upjohn Institute for Employment Research, Kalamazoo, Mich.
- GORDON H. LEWIS, School of Urban and Public Affairs, Carnegie Mellon University
- ROBERT MOFFITT, Department of Economics, Brown University
- GAIL R. WILENSKY, Health Care Financing Administration, U.S. Department of Health and Human Services [served until January 1990]
- MICHAEL C. WOLFSON, Analyfical Studies Branch, Statistics Canada
- CONSTANCE F. CITRO, Study Director
- MICHAEL L. COHEN, Consultant
- CHRISTINE M. ROSS, Research Associate
- AGNES E. GASKIN, Administrative Secretary
| CONTENTS | ||
| ACKNOWLEDGMENTS | ||
| SUMMARY | ||
| Improving the Tools of Policy Analysis: Investment Priorities | 2 | |
| The Role of Microsimulation as a Policy Analysis Tool | 8 | |
| Recommendations for Improving Policy Analysis | 13 | |
| Recommendations for Microsimulation Models | 15 | |
| 1 | INTRODUCTION | |
| A Scene in Washington, D.C. | 21 | |
| The Tools of Policy Analysis | 24 | |
| The Panel Study | 26 | |
| PART I -- INFORMATION FOR SOCIAL WELFARE POLICY: TOWARD A SECOND REVOLUTION | ||
| 2 | THE SEARCH FOR USEFUL INFORMATION | |
| The First Information Revolution | 35 | |
| Policy Analysis: Between Social Science Research and Politics | 38 | |
| A Case Study of Policy Analysis: The Family Support Act of 1988 | 41 | |
| 3 | IMPROVING THE TOOLS AND USES OF POLICY ANALYSIS | |
| A Strategy for Investment | 52 | |
| Data Quality and Availability | 55 | |
| Validation | 72 | |
| Documentation and Communication of the Results of Policy Analysis | 84 | |
| APPENDIX: MODELS, UNCERTAINTY, AND CONFIDENCE INTERVALS | ||
| Models | 89 | |
| Uncertainty of an Estimate | 90 | |
| Conditional Versus Unconditional Confidence Intervals | 93 | |
| An Illustrative Diagram | 95 | |
| PART II -- THE ROLE OF MICROSIMULATION AS A POLICY ANALYSIS TOOL4. MICROSIMULATION MODELS: THEN AND NOW | ||
| Basic Elements of Microsimulation Models | 101 | |
| Development of Microsimulation Modeling for Policy Analysis | 107 | |
| Role and Current Status of Microsimulation: Findings | 114 | |
| 5 | DATABASES FOR MICROSIMULATION | |
| Data Quality: The March CPS | 125 | |
| Strategies for Treating Missing and Erroneous Data, 132 The Promise of SIPP | 137 | |
| Recommendations for Improving Data Quality, 1396. MODEL | ||
| DESIGN AND DEVELOPMENT | ||
| Model Design Principles and Practices | 155 | |
| Current Microsimulation Model Design | 161 | |
| Strategic Directions for Microsimulation Model Development | 164 | |
| 7 | COMPUTING TECHNOLOGY AND MICROSIMULATION | |
| The Evolution of Microsimulation Computing Platforrns | 183 | |
| New Developments in Computing Technology | 185 | |
| Future Directions for Computing in Microsimulation | 191 | |
| 8 | MICROSIMULATION MODELING OF HEALTH CARE, RETIREMENT INCOME, AND TAX POLICIES | |
| Health Care Policies | 195 | |
| Retirement Income Policies, | 212 | |
| Tax Policies, 2199. VALIDATION | ||
| Corroboration as a Stand-in for Validation | 233 | |
| Techniques of Model Validation | 235 | |
| Review of Validation Studies | 241 | |
| A Validation Study of TRIM2: The Panel's Experiment | 248 | |
| Strategies for Validating Microsimulation Models: Recommendations | 259 | |
| 10 | DOCUMENTATION AND ARCHIVING | |
| Standards for Model Documentation | 266 | |
| A Documentation Case Study | 268 | |
| Recommendations | 270 | |
| 11 | THE MICROSIMULATION MODELING COMMUNITY | |
| Relationships Among Federal Agencies | 274 | |
| Policy Analysis Agencies and Their Suppliers | 278 | |
| Policy Analysis Agencies and Decision Makers' Staffs | 280 | |
| The Role of Research | 281 | |
| APPENDIX: MICROSIMULATION MODELS, DATABASES, AND MODELING TERMS | ||
| Models | 290 | |
| Databases | 298 | |
| Modeling Terms | 302 | |
| GLOSSARY OF ACRONYMS | ||
| REFERENCES | ||
| BIOGRAPHICAL SKETCHES OF PANEL MEMBERS AND STAFF | ||
