nep-cmp New Economics Papers
on Computational Economics
Issue of 2005‒09‒11
eight papers chosen by
Stan Miles
York University

  1. Robust optimization using computer experiments By Stinstra,Erwin; Hertog,Dick den
  3. Beam search algorithms for the single machine total weighted tardiness scheduling problem with sequence-dependent setups By Jorge M. S. Valente
  4. The Poverty Impacts of the Doha Round in Cameroon: the Role of Tax Policy By Christian Arnault Emini; John Cockburn; Bernard Decaluwe
  5. Deterrence Capacity, Relative Performance, Adjustment Costs, Hazard, Killing Aversion and the Optimal Enlistment Age By Levy, Amnon
  6. Exchange Rate Policy in a Dollarized Economy: A CGE Analysis for Bolivia By Rainer Schweickert; Rainer Thiele; Manfred Wiebelt
  7. Minimum Wages and Poverty in a Developing Country: Simulations from Indonesia's Household Survey By Kelly Bird; Chris Manning
  8. A Practical Optimal Quarantine Measure By Tom Kompas; Tuong Nhu Che

  1. By: Stinstra,Erwin; Hertog,Dick den (Tilburg University, Center for Economic Research)
    Abstract: During metamodel-based optimization three types of implicit errors are typically made. The first error is the simulation-model error, which is defined by the difference between reality and the computer model. The second error is the metamodel error, which is defined by the difference between the computer model and the metamodel. The third is the implementation error. This paper presents new ideas on how to cope with these errors during optimization, in such a way that the final solution is robust with respect to these errors. We apply the robust counterpart theory of Ben-Tal and Nemirovsky to the most frequently used metamodels: linear regression and Kriging models. The methods proposed are applied to the design of two parts of the TV tube. The simulationmodel errors receive little attention in the literature, while in practice these errors may have a significant impact due to propagation of such errors.
    Keywords: computer simulation;robust counterpart;simulation-model error;implementation error;metamodel error
    JEL: C61 C15
    Date: 2005
    Abstract: Time/cost trade-offs in project networks have been the subject of extensive research since the development of the critical path method (CPM) in the late 50s. Time/cost behaviour in a project activity basically describes the trade-off between the duration of the activity and its amount of non-renewable resources (e.g. money) committed to it. In the discrete version of the problem (the discrete time/cost trade-off problem), it is generally accepted that the trade-off follows a discrete non-increasing pattern, i.e. expediting an activity is possible by allocating more resources (i.e. at a larger cost) to it. However, due to its complexity (the problem is known to be NP hard (see De et al. (1997)), the problem has been solved for relatively small instances. In this paper, we elaborate on three extensions of the well-known discrete time/cost trade-off problem in order to cope with more realistic settings: time/switch constraints, work continuity constraints and net present value maximization. We give an extensive literature overview of existing procedures for these problem types, and present an exact solution approach for the work continuity version, which is not being investigated yet. Moreover, we discuss a new meta-heuristic approach in order to provide near-optimal heuristic solutions for the different problems. We present computational results for the problems under study by comparing the results for both exact and heuristic procedures. We demonstrate that the heuristic algorithms produce consistently good results for two versions of the discrete time/cost trade-off problem.
    Date: 2005–06
  3. By: Jorge M. S. Valente (Faculdade de Economia, Universidade do Porto)
    Abstract: In this paper, we consider the single machine weighted tardiness scheduling problem with sequence-dependent setups. We present heuristic algorithms based on the beam search technique. These algorithms include classic beam search procedures, as well as the filtered and recovering variants. Previous beam search implementations use fixed beam and filter widths. We consider the usual fixed width algorithms, and develop new versions that use variable beam and filter widths. Two new improvement procedures, based on adjacent pairwise interchanges and 3-swaps, are also presented. The computational results show that the beam search versions with a variable width are marginally superior to their fixed value counterparts, even when a lower average number of beam and filter nodes is used. The best results are given by the filtered beam search algorithms. For large problems, however, these procedures require excessive computation times. The priority beam search algorithms are much faster, and can therefore be used for the largest instances. The 3-swap method is the best of the improvement procedures, giving the largest relative improvement and decreasing the total cost for a larger number of instances.
    Keywords: scheduling, weighted tardiness, sequence-dependent setups, beam search
    Date: 2005–08
  4. By: Christian Arnault Emini; John Cockburn; Bernard Decaluwe
    Abstract: The aim of this chapter is to assess the possible impacts of the Doha round of negotiations on poverty in Cameroon. During the recent period of economic recovery, Cameroon has enjoyed a sharp decline in poverty with the headcount index falling from 53.3 percent of inhabitants in 1996 to 40.2 percent in 2001, mostly thanks to economic growth rather than redistribution. Will the current trade negotiations under the Doha Round reinforce or curb this trend? We apply a CGE microsimulation model which involves 10,992 households in order to address this question. The Doha Round is found to be poverty reducing for Cameroon. For the whole country, the estimate of net number of people who are lifted out of poverty is 22,000 following this scenario. Further investigations indicate that more ambitious world trade liberalization leads to greater poverty alleviation at the national level, while Cameroon's domestic trade liberalization has adverse poverty and inequality impacts - despite giving rise to higher aggregate welfare. Under the Doha scenario, the cuts in Cameroon's tariffs in the Doha scenarios are very small (the average tariff rate moves from 11.79 percent in the base run to merely 11.66 percent) so that ROW liberalization effects on world prices more than offset the adverse own liberalization effects in this scenario. If the Rest of the World (ROW) and Cameroon full trade liberalizations are combined, the adverse impacts of own liberalization outweigh the favourable outcomes of the ROW liberalizations. Our results suggest furthermore that the choice of tax replacement instrument canhaave an important bias in poverty impacts: poverty gets worse in our country-case study when using an imperfect VAT instead of a neutral replacement tax to compensate lost tariff revenue, and gets even worse when using consumption tax. Key reasons here are the Chapter 12 in Putting Development Back into the Doha Agenda: Poverty Impacts of a WTO Agreement, Thomas W. Hertel and L. Alan Winters (eds) forthcoming from the World Bank, Washington, DC.
    Keywords: Computable General Equilibrium, Microsimulation, International Trade, Poverty, Cameroon
    JEL: D33 D58 E27 F13 F14 I32 O15 O53
    Date: 2005
  5. By: Levy, Amnon (University of Wollongong)
    Abstract: Early-age enlistment increases a small country's potential army size and thereby its attack-deterrence capacity. However, physical and psychological injuries and, ultimately, death generate a loss of quality-adjusted life-years that reduces the net benefit from early-age enlistment. The net benefit from early or later age recruitment is also affected by the rise and decline of the individual's military performance and civilian productivity and by changes in his adjustment costs over the lifespan. The simulations of an optimization model incorporating these elements suggest that if the intensity of the rise and decline of the individual's military performance is sufficiently larger than the intensity of the rise and decline of his civilian productivity, there exists an interior optimal enlistment age greater than the commonly practiced eighteen. In such a case, most of the simulation results are closely scattered around twenty-one despite large parameter changes.
    Keywords: Economics, enlistment-age, risk, cost and benefit, decision rule
    Date: 2005
  6. By: Rainer Schweickert; Rainer Thiele; Manfred Wiebelt
    Abstract: In this paper, a real-financial CGE model is employed for Bolivia to simulate the macroeconomic and distributional effects of exchange rate policy in a highly dollarized economy. Overall, dollarization appears to matter more through real than through financial-sector effects. The main macroeconomic result of the simulations is that the potential of nominal devaluation to smooth the adjustment path after a negative shock primarily depends on the absence of wage indexation. Only if nominal wages are constant in the short run, devaluation reduces unemployment and cushions the reduction of real GDP induced by the shock. Financial de-dollarization tends to be contractionary in Bolivia but different degrees of financial dollarization hardly change the real sector effects. As concerns distributional effects, nominal devaluation in no circumstance reduces the poverty effect of the external shock. Even the significant short-run macroeconomic expansion that occurs without wage indexation does not translate into significant poverty alleviation, which is due to the fact that the real value of transfers received by households decreases in this case.
    Keywords: Dollarization, Poverty, Computable General Equilibrium Model, Bolivia
    JEL: O16 D3 C68
    Date: 2005–07
  7. By: Kelly Bird; Chris Manning
    Abstract: This study focuses on the efficiency of minimum wage policy for poverty reduction, taking Indonesia as a case study. A simulation approach assesses who benefits and who pays for minimum wage increases. On the benefits side, the rise in minimum wages boosts incomes in households with low wage workers. However, increases in wage costs are passed on through higher consumer prices. As a result, three out of four poor households lose in net terms, even when we assume no job losses. The findings suggest that minimum wages are unlikely to be an effective antipoverty instrument, at least for Indonesia.
    Keywords: Minimum Wages, Poverty, Income distribution, Indonesia
    JEL: I31 J33 J38 O15
    Date: 2005
  8. By: Tom Kompas (Asia Pacific School of Economics and Management, Australian National University); Tuong Nhu Che (Australian Bureau of Agricultural and Resource Economics, Canberra)
    Abstract: Quarantine programs have generally provided an essential protection against the importation of exotic diseases, thus protecting both consumers and producers from major health concerns and pests and diseases that can potentially destroy local agricultural production. However, quarantine measures also impose costs in the form of expenditures on the quarantine program itself and the welfare losses that are associated with such trade restrictions. This paper develops a simple model to determine the optimal level of quarantine activity for imported livestock by minimizing the present-value of the direct costs of the disease, the cost of the quarantine program and any resulting welfare losses. The result defines a practical measure for the optimal number of infected livestock that may potentially enter a region in a given year. The model is then applied to the case of Ovine Johne’s Disease and its potential entry to the sheep industry in Western Australia. All key parameter values are subject to random variation and the optimal solution and sensitivity measures are obtained with a genetic algorithm.
    Keywords: Quarantine measures, Ovine Johne’s Disease, agricultural policy
    JEL: Q17 Q28 R59
    Date: 2004–01

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