nep-cmp New Economics Papers
on Computational Economics
Issue of 2015‒11‒07
eleven papers chosen by

  1. Inefficiency and Self-Determination: Simulation-Based Evidence From Meiji Japan By Eric Weese; Masayoshi Hayashi; Masashi Nishikawa
  2. Rational versus Adaptive Expectations in an Agent-Based Model of a Barter Economy By Shyam Gouri Suresh
  3. A Framework for Ex-Ante Economic Analysis of Tourism Investments: An Application to Haiti By Onil Banerjee; Martin Cicowiez; Sebastien Gachot
  4. The Impact of Crop Diversification Measure: EU-wide Evidence Based on IFM-CAP Model By Louichi, Kamel; Ciaian, Pavel; Espinosa, Maria; Colen, Liesbeth; Perni, Angel; Palima, Sergio
  5. Validation of a non-parametric farm level crop choice simulation method By Mahy, Louis; Dupeux, Berenice; Buysse, Jeroen
  6. Trajectory based models. Evaluation of minmax pricing bounds By Ivan Degano; Sebastian Ferrando; Alfredo Gonzalez
  7. Options to improve food security in North Africa: CGE modelling of deeper trade and investment integration with the European Union By Boulanger, Pierre; Kavallari, Aikaterini; M'barek, Robert; Rau, Marie; Rutten, Martine
  8. Effects of Redistributive Policies on Income Distribution: An Intertemporal CGE Analysis By Aykut Mert Yakut
  9. Foreign IPR, Trade and Innovation: Does complexity matter? By José Fernández Donoso
  10. Evaluation of IPM adoption and financial instruments to reduce pesticide use in Thai agriculture using econometrics and agent-based modeling By Grovermann, Christian; Schreinemachers, Pepijn; Berger, Thomas
  11. A Comparison of the Welfare Impacts of Thai Rice Price Support and Deficiency Payment Programs By Duangbootsee, Uchook; Myers, Robert

  1. By: Eric Weese (Economic Growth Center, Yale University); Masayoshi Hayashi (University of Tokyo); Masashi Nishikawa (Aoyama Gakuin University)
    Abstract: Does the exercise of the right of self-determination lead to inefficiency? This paper considers a set of centrally planned municipal mergers during the Meiji period, with data from Gifu prefecture. The observed merger pattern can be explained as a social optimum based on a very simple indiidual utility function. If individual villages had been allowed to choose their merger partners, counterfactual simulations show that the core is always non-empty, but core partitions contain about 80% more (post-merger) municipalities than the social optimum. Simulations are possible because core partitions can be calculated using repeated application of a mixed integer program.
    Keywords: Municipal mergers, one-sided matching, moment inequalities, mixed integer programming, Gifu
    JEL: C63 C71 H77 K33 N95
    Date: 2015–08
  2. By: Shyam Gouri Suresh
    Abstract: This paper constructs an agent-based model of a simple barter economy with stochastic productivity shocks. Each agent produces a certain variety of a good but can only consume a different variety that she receives through barter with another randomly paired agent. The model is constructed bottom-up (i.e., without a Walrasian auctioneer or price-based coordinating mechanism) through the simulation of purposeful interacting agents. The benchmark version of the model simulates homogeneous agents with rational expectations. Next, the benchmark model is modified by relaxing homogeneity and implementing two alternative versions of adaptive expectations in place of rational expectations. These modifications lead to greater path-dependence and the occurrence of inefficient outcomes (in the form of sub-optimal over- and under-production) that differ significantly from the benchmark results. Further, the rational expectations approach is shown to be qualitatively and quantitatively distinct from adaptive expectations in important ways.
    Keywords: Agent-Based Modeling, Rational Expectations, Adaptive Expectations, Multiple Equilibria
    JEL: B41 C6 D84 E17
    Date: 2015–08
  3. By: Onil Banerjee; Martin Cicowiez; Sebastien Gachot
    Abstract: This study develops a linked regional computable general equilibrium and micro-simulation (RCGE-MS) model to assess the regional economy-wide and poverty impacts of a US$36 million investment in tourism in the south of Haiti. The first social accounting matrix for Haiti with a base year of 2012/2013 was constructed to calibrate the model. This research addresses three key gaps identified in the tourism impact assessment literature. First, a destination-specific tourism demand and value chain analysis was used to calibrate the shocks implemented in the model. Second, the RCGE-MS approach moves beyond the representative household configuration to enable more robust analysis of tourism investment impacts on poverty and income inequality. Third, results of this modelling were used to inform a social cost-benefit analysis to provide greater transparency in the evaluation of trade-offs between investment alternatives. Results of this analysis showed a positive impact on sectoral activity, especially for the hotel and restaurant sector (182.1% in 2040) and a 2.0% increase in Gross Regional Product by 2040. The South's exports fell 4.7% below baseline and imports were 6.1% higher due to the inflow of foreign exchange, the appreciation of the regional real exchange rate, increased demand for most goods and services, and limited regional productive capacity. The rate of unemployment fell from 26% to 23%. The investment helped lift some of the region¿s poorest out of poverty, reducing the poverty headcount by 1.6 percentage points. Driving this result was an increase in employment, wages and non-labor income. The linked RCGE-MS approach proves to be a powerful tool for assessing how tourism investments affect regional economic activity and revealing the mechanisms through which tourism can contribute to increased employment opportunities and poverty reduction.
    Keywords: Impact evaluation, Tourism, Rural & Urban Development, Public Sector, Computable General Equilibrium, Tourism Investment, Regional Welfare, Poverty, International Investment, Benefit Cost
    Date: 2015–08
  4. By: Louichi, Kamel; Ciaian, Pavel; Espinosa, Maria; Colen, Liesbeth; Perni, Angel; Palima, Sergio
    Abstract: This paper presents simulation results of crop diversification measure adopted as part of the CAP greening within the 2013 CAP reform. The simulations are performed using the EU-wide individual farm-based model for CAP analysis (IFM-CAP). The IFM-CAP model is a static positive mathematical programming model builds on the EU-FADN (Farm Accountancy Data Network) data. The model is calibrated to the FADN farm constant sample for 2007- 2009 representing around 60,500 individual farms. The advantage of this model relative to existing models is that it captures the full heterogeneity of the EU farm population and covering all Member States. Results show that most farms choose to increase their compliance with the diversification measure owing to the sizable subsidy reduction imposed in case of non-compliance. However, the overall impact on farm income is rather limited: farm income decreases by less than 1% at EU level, and only 5% of the farm population will be negatively affected. Nevertheless, for a small number of farms the income effect could be more substantial (more than -10%).
    Keywords: Crop Production/Industries, Environmental Economics and Policy,
    Date: 2015
  5. By: Mahy, Louis; Dupeux, Berenice; Buysse, Jeroen
    Abstract: Mahy et al. (2014) have developed a non-parametric methodology to predict land use choices of farmers in the context of the crop diversification measure. The methodology uses simulation at the micro level because crops cultivated by one farm cannot compensate for a lack of diversity of crops at another farm. A key difficulty of simulating at farm level is that the crop choice of an individual farmer is very difficult to predict because it depends on more factors than gross margins only, such as crop rotation, farmers experience, adaptability of machines and supply chain possibilities of the harvested products. The non-parametric methodology presented in this paper uses peer behaviour of farmers to identify choices of other farmers. This paper validates and compares the approach with improved versions on a regional case study in Flanders to show the possibilities and limitations of the methodology.
    Keywords: Crop Production/Industries, Farm Management,
    Date: 2015
  6. By: Ivan Degano; Sebastian Ferrando; Alfredo Gonzalez
    Abstract: The paper studies market models based on trajectory spaces, properties of such models are obtained without recourse to probabilistic assumptions. For a given European option, an interval of rational prices exists under a more general condition than the usual no-arbitrage requirement. The paper develops computational results in order to evaluate the option bounds; the global minmax optimization, defining the price interval, is reduced to a local minmax optimization via dynamic programming. A general class of trajectory sets is described for which the market model introduced by Britten Jones and Neuberger is nested as a particular case. We also develop a market model based on an operational setting constraining market movements and investor's portfolio rebalances. Numerical examples are presented, the effect of the presence of arbitrage on the price bounds is illustrated.
    Date: 2015–11
  7. By: Boulanger, Pierre; Kavallari, Aikaterini; M'barek, Robert; Rau, Marie; Rutten, Martine
    Abstract: This paper presents some macro and food security impacts of deeper economic integration between the European Union and three North African countries, namely Egypt, Morocco and Tunisia. It conducts a quantitative impact assessment of increase in trade and investment flows using the Modular Applied General Equilibrium Tool (MAGNET). Trade liberalization enhances food security by counteracting the rise in food prices, fostered by growing demand for agricultural products in North Africa. Investments either on the whole economy or targeted to cutting down losses (waste) in food production are modelled. Results suggest that economic growth is stimulated mostly by widespread productivity gains (not restricted to agri-food sector) and boosted by trade integration through removal of non-tariff measures.
    Keywords: Food Security and Poverty,
    Date: 2015
  8. By: Aykut Mert Yakut (Middle East Technical University, Department of Economics)
    Abstract: Despite enormous increase in global financial liquidity from the beginning of 2000s until 2007-8, the income distribution in developing countries did not improve. Moreover, due to the effects of the global financial crisis, the income distribution even get worsened; the income difference between the richest and the poorest households widened within each country. This is also the phenomenon in Turkey: in 2003-14 period the real per capita GDP has increased by 43.4% while the poverty rate (share of population whose income is half of the median income) and the income inequality (Gini coefficient) have experienced limited recoveries. This paper, with the aid of an intertemporal model that reflects the decision making processes of different representative household groups and firms in a small open economy framework, focuses on the effects of re-distributional policies on the income distribution. Segmented labor markets and existence of non-Ricardian type of households who does not have a saving decision are major structural components of the model. In the calibration process, a micro-level non-longitudinal data set, Household Budget Survey (HBS), is utilized to obtain the household level parameters and also to construct the multi-sector production side of the model. This study, to our best knowledge, is the first effort to analyze the income distribution for the Turkish economy by using differentiated household structure in an intertemporal dynamic setting and by focusing on redistribute policies. Moreover, it is also the first study that uses a micro-level data set to calibrate the household level parameters and to construct a production side that is consistent with the private consumption expenditure composition.
    Keywords: Income Distribution, Intertemporal CGE, Redistributive Policies
    JEL: D33 D58 D91 D92 H23
    Date: 2015
  9. By: José Fernández Donoso (School of Business and Economics, Universidad del Desarrollo)
    Abstract: This paper studies the relation between foreign intellectual property rights affect exporting firms' productivity when industries have different technological complexity. Using simple functional forms, the dynamic model derives endogenous steady state distributions of exporting firms' productivity. Numerical simulations show a non-monotonic effect of complexity on productivity, and a positive effect of IPR. Empirical evidence using labor productivity measures support the findings of the theoretical model
    Keywords: Export-led growth, Intellectual Property Rights, Imitation, Patents, Productivity
    Date: 2015–10
  10. By: Grovermann, Christian; Schreinemachers, Pepijn; Berger, Thomas
    Abstract: Agricultural commercialization in Asia has led to an increased dependence on synthetic pesticides, especially for high-value fruit and vegetable crops. The present study uses the multi-agent modeling software MPMAS to ex-ante assess the impact of different pesticide use reduction strategies. The model is parameterized with data from an intensive and diverse production systems in the mountainous north of Thailand, where the adoption of cash crops has been accompanied by very high levels of pesticide use. The objective of this study is to compare different policy interventions in terms of their impact on pesticide use, farm incomes and land use. The adoption of integrated pest management (IPM) is assessed in combination with tax instruments and with adoption incentives, such as bio-pesticide subsidies and price premiums. The results show that a smart policy package can reduce pesticide use by up to 34% over five years without income trade-offs for farm households.
    Keywords: Agent-based modeling, ex-ante assessment, innovation diffusion, pesticide policy, integrated pest management, Crop Production/Industries,
    Date: 2015
  11. By: Duangbootsee, Uchook; Myers, Robert
    Abstract: The objective of this study is to compare welfare impacts of the price support program (PSP) and deficiency payment program (DPP) by applying a computational model to calculate counterfactual values of quantity and price that would have occurred under alternative policy scenarios. The results indicate that replacing the PSP with DPP, while keeping the target price under DPP at the same level as the support price under PSP, results in an increase in total supply and a decrease in market price. The transfer to farmers in the form of an increase in producer surplus is more efficient under DPP while consumer surplus shrinks considerably under PSP. Deadweight loss accounts for as much as 11-13.6% of Government spending under PSP while it is less than 1% under DPP. Thus, DPP is more efficient because it results in a larger percentage increase in producer surplus and smaller deadweight loss than PSP.
    Keywords: Price support program, Deficiency payment program, Thai rice market, Partial equilibrium modeling, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety,
    Date: 2015

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