nep-cmp New Economics Papers
on Computational Economics
Issue of 2015‒10‒10
nine papers chosen by
Stan Miles
Thompson Rivers University

  1. The Impact of the Dividend Tax in South Africa: A Dynamic CGE Model Analysis By Jean Luc Erero and Elizabeth Gavin
  2. Efficient Randomized Quasi-Monte Carlo Methods For Portfolio Market Risk By Halis Sak; \.Ismail Ba\c{s}o\u{g}lu
  3. Metropolitan Area Home Prices and the Mortgage Interest Deduction: Estimates and Simulations from Policy Change By Martin, Hal; Hanson, Andrew
  4. Simulation Analyses of Production Adjustment Policies for Rice Farming: Policy effects of crop diversion programs and solar sharing (Japanese) By SAITO Keiji; OHASHI Hiroshi
  5. Modelo espacial simples da economia: uma proposta teórico-metodológica By Furtado, Bernardo Alves; Eberhardt, Isaque Daniel Rocha
  6. Energy Efficiency Drivers in South Africa: 1965-2014 By Goodness C. Aye; Rangan Gupta; Peter Wanke
  8. Application of Artificial Intelligence Methods for Analysis of Material and Non-material Determinants of Functioning of Young Europeans in Times of Crisis in the Eurozone By Gawlik, Remigiusz
  9. Logistics and transport in Colombia: factors affecting the export performance By Diana Marcela Escandon Barbosa

  1. By: Jean Luc Erero and Elizabeth Gavin
    Abstract: This paper analyses the economy-wide impact of the dividend tax (DT) on the South African economy, which was increased from 10% to 15% by the government in 2012. The analysis was conducted using a dynamic computable general equilibrium (CGE) model of South Africa, which captured the observed structure of South Africa’s economy. The parameters of the CGE equations were calibrated to observed data from a social accounting matrix (SAM) for 2010. One policy option was considered. Our simulation results show that the impact of increasing the DT will have a minute but positive impact on the reported macro-economic variables in the immediate year of implementing the DT rate increases. GDP increases by 0.0585% and 0.5085% in 2013 and 2018 will be seen respectively. This change was small in 2013 but will be significant in 2018. The key finding is that at the macro level, the implementation of the policy shock on its own had a positive macroeconomic impact.
    Keywords: dividend tax, secondary tax on companies, CGE model, South Africa
    JEL: D33 D58 H25
    Date: 2015
  2. By: Halis Sak; \.Ismail Ba\c{s}o\u{g}lu
    Abstract: We consider the problem of simulating loss probabilities and conditional excesses for linear asset portfolios under the t-copula model. Although in the literature on market risk management there are papers proposing efficient variance reduction methods for Monte Carlo simulation of portfolio market risk, there is no paper discussing combining the randomized quasi-Monte Carlo method with variance reduction techniques. In this paper, we combine the randomized quasi-Monte Carlo method with importance sampling and stratified importance sampling. Numerical results for realistic portfolio examples suggest that replacing pseudorandom numbers (Monte Carlo) with quasi-random sequences (quasi-Monte Carlo) in the simulations increases the robustness of the estimates once we reduce the effective dimension and the non-smoothness of the integrands.
    Date: 2015–10
  3. By: Martin, Hal (Federal Reserve Bank of Cleveland); Hanson, Andrew (Marquette University)
    Abstract: We simulate changes to metropolitan area home prices from reforming the Mortgage Interest Deduction (MID). Price simulations are based on an extended user cost model that incorporates two dimensions of behavioral change in home buyers: sensitivity of borrowing and the propensity to use tax deductions. We simulate prices with both inelastic and elastic supply. Our results show a wide range of price effects across metropolitan areas and prospective policies. Considering behavioral change and no supply elasticity, eliminating the MID results in average home price declines as steep as 13.5 percent in Washington, D.C., and as small as 3.5 percent in Miami-Fort Lauderdale, Florida. Converting the MID to a 15 percent refundable credit reduces prices by as much as 1.4 percent in San Jose, California, San Francisco, California, and Washington, D.C., and increases average prices in other metropolitan areas by as much as 12.1 percent (Miami- Fort Lauderdale). Accounting for market elasticities produces price estimates that are on average thirty-six percent as large as standard estimates.
    Keywords: house prices; housing subsidy; mortgage interest deduction
    JEL: H24 R21 R28
    Date: 2015–10–06
  4. By: SAITO Keiji; OHASHI Hiroshi
    Abstract: Using micro-data of the Census of Agriculture and Forestry, this paper analyzes farmers' choices related to production adjustment policies for rice farming. Based on estimates of the choice model, we evaluate future agricultural policies such as crop diversion programs and solar sharing through simulations.The Japanese Cabinet approved the Basic Plan for Food, Agriculture and Rural Areas in March 2015. The plan sets a high goal of increasing rice production for non-staple food. If support for rice production of non-staple food substantially increases as planned, the burden on taxpayers or consumers will increase drastically. Comparing this to the case of curbed support for non-staple food at the level in 2013, the increased burden on consumers or taxpayers will be ¥358 billion in 2019 based on simulation conducted. The high goal of rice production for non-staple food should be reconsidered.
    Date: 2015–10
  5. By: Furtado, Bernardo Alves; Eberhardt, Isaque Daniel Rocha
    Abstract: This study simulates the evolution of artificial economies in order to understand the tax relevance of administrative boundaries in the quality of life of its citizens. The modeling involves the construction of a computational algorithm, which includes citizens, bounded into families; firms and governments; all of them interacting in markets for goods, labor and real estate. The real estate market allows families to move to households with higher quality or lower price when the families capitalize property values. The goods market allows consumers to search on a flexible number of firms choosing by price and proximity. The labor market entails a matching process between firms (given its location and offered wage) and candidates, according to their qualification. The government may be configured into a single region, or four or seven distinct sub-national governments, which are all economically conurbated. The role of government is to collect taxes on the value added of firms in its territory and transform the taxes into higher levels of quality of life for residents. Among the limitations of the model, we highlight the difficulty of composing adjustments between processes, classes and agents in time and space. In addition, the model does not yet have a credit market, given the emphasis of the research question on the relevance of municipal administrative boundaries. The analysis of the markets indicate development paths and data-generating mechanisms for each territorial approach used. The results suggest that the configuration of administrative boundaries is relevant to the levels of quality of life arising from the reversal of taxes. The model with seven regions is more dynamic, with higher GDP values, but more unequal and heterogeneous across regions. The simulation with only one region is more homogeneously poor. The study seeks to contribute to a theoretical and methodological framework and to describe, operationalize and test computer models of public finance analysis, with explicitly spatial and dynamic emphasis. Several alternatives of expansion of the model for future research are described, including application to adjacent municipalities of Brazilian metropolitan areas. Moreover, this study adds to the existing literature in the realm of simple microeconomic computational models, specifying relationships between local governments and firms, consumers and households mediated by distance.
    Keywords: modelagem; finanças públicas; tributos; municípios; limites; qualidade de vida
    JEL: C63 D01 H73
    Date: 2015–10–02
  6. By: Goodness C. Aye (Department of Economics, University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria); Peter Wanke (COPPEAD Graduate Business School, Federal University of Rio de Janeiro, Rua Paschoal Lemme, 355. 21949-900 Rio de Janeiro)
    Abstract: This paper presents an efficiency assessment in South Africa from 1965-2014 using Technique for Order Preference by Similarity to The Ideal Solution (TOPSIS). In this research, TOPSIS is used first in a two-stage approach to assess how energy efficiency in South Africa evolved using the most frequent indicators adopted by the literature. Afterwards, in the second stage, neural networks are combined with TOPSIS results as part of an attempt to produce a model for energy performance with effective predictive ability. The results reveal different impacts of contextual variables, such as the rise of China in foreign trade, the Apartheid Regime, and oil shocks, on energy efficiency levels in South Africa.
    Keywords: energy efficiency, South Africa, TOPSIS, two-stage, neural networks
    Date: 2015–10
  7. By: Christian Meier (University of Paderborn)
    Abstract: In the literature, there is anecdotal as well as empirical evidence for the existence and the business impact of output interactions among information systems projects. While a lot of sophisticated optimization models have been suggested which already provide for the consideration of output interactions when selecting information systems project portfolios, the necessary data required for their application in business practice are usually not available to the planner. There is a lack of techniques in the literature on how to identify output interactions already at the time, a portfolio is planned. We attribute this lack to the rather semantical nature of output interactions. We contribute to filling the identified gap by conferring semantic clustering - a technique originating in the text mining literature - to the field of information systems project portfolio selection. A prototypical decision support system is developed that uses latent semantic analysis and hierarchical clustering to identify potential output interactions among information systems project proposals based on semantic similarities within their goal descriptions. This paper focuses on the design of the developed prototype and argues that latent semantic analysis represents a very promising technique for the identification of output interactions among information systems projects.
    Keywords: Information Systems, Project Portfolio Selection, Project Interactions, Latent Semantic Analysis, Semantic Clustering
    JEL: C44
    Date: 2015–06
  8. By: Gawlik, Remigiusz
    Abstract: The study presents an analysis of possible applications of artificial intelligence methods for understanding, structuring and supporting the decision-making processes of European Youth in times of crisis in the Eurozone. Its main purpose is selecting a research method suitable for grasping and explaining the relations between social, economic and psychological premises when taking important life decisions by young Europeans at the beginning of their adult life. The interdisciplinary approach to science, assuming inclusion of economic phenomena in the analysis of issues belonging to other domains of science, contributes to further development of economics. Thus, the foundations of the economy are being redefined, whereas the dogma of rationality of consumer behaviour no longer binds. The researchers depart from their former deliberations on mass production , they also no longer claim that they understand the character of consumers’ preferences. The increased interest of economists in research instruments which employ artificial intelligence encourages them to use mathematical and IT tools to explain decision-making processes. This group of methods, based on fuzzy logic methodology offers the possibility of including into their research factors of a qualitative character (in addition to quantitative ones). It is equally important to identify possible fields of implementation of the results of qualitative – quantitative analysis in economic and social practice. A benefit for the business could be the possibility of better adjustments to new trends and consumers’ preferences. Social effects of the implementation should stem from supporting decision-making processes until facilitating professional and personal development of young people. Broadening of knowledge in this sphere will allow the responders to perform individual valuation of the material and non-material determinants of the quality of their life, which will eventually contribute to the growth of their life satisfaction. It will indirectly contribute to the increase of the overall level of satisfaction in the society.
    Keywords: Artificial Intelligence, determinants of decision-making, European Youth
    JEL: C45 D6
    Date: 2014
  9. By: Diana Marcela Escandon Barbosa (Faculty of Economics and Management, Pontificia Universidad Javeriana Cali)
    Abstract: The election of a country destination to export is one of the problems with greater interest within the field of internationalization of companies. Companies seek to minimize labor costs, transport, tariff and other issues affecting their choice. However, transportation costs and logistics becomes in a key aspect in the enterprise competitiveness for access to international markets. Therefore, from the application of a survey of 319 exporting companies in Colombia a model of neural networks is performed to measure as factors affecting export performance variables such as efficiency in the process of customs clearance and other border agencies, ease and affordability of international shipping, transport infrastructure and technologies adequate, level of competence of the local logistics industry, ability to track and trace consignments and timely deliveries destination. Among the main findings is that the level of competence of the local logistics industry manages to be the most important variable for export performance in Colombian companies because they can improve pricing systems and the existence of lower export costs.
    Keywords: International transport, Export Performance, Logistics
    JEL: F14 M16
    Date: 2015–09

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