nep-cmp New Economics Papers
on Computational Economics
Issue of 2016‒04‒30
ten papers chosen by

  1. Prediction of Gas Concentration Based on the Opposite Degree Algorithm By Xiao-Guang Yue; Rui Gao; Michael McAleer
  2. Process-based simulation of regional agricultural supply functions in Southwestern Germany using farm-level and agent-based models By Troost, Christian; Berger, Thomas
  3. REDD policy impacts on the agri-food sector and food security By Tabeau, Andrzej; van Meijl, Hans; Overmars, Koen P.; Stehfest, Elke
  4. Out-of-pocket health payments: a catalyst for agricultural productivity growth, but with potentially impoverishing effects By Sene, Ligane Massamba; Badiane, Ousmane
  5. Fiscal Federalism and Tax Equalization: The potential for progressive local taxes By Debra Hevenstone; Ben Jann
  6. Parallelization experience with four canonical econometric models using ParMitISEM By Baştürk N.; Grassi S.; Hoogerheide L.; Dijk H.K. van
  7. Revisiting the tax compliance problem using prospect theory. By Rao, R. Kavita; Tandon, Suranjali
  8. Market Level Effects of World Food Program Local and Regional Procurement of Food Aid in Africa By Zavale, Helder; Myers, Robert; Tschirley, David
  9. New Reformulations for the Conflict Resolution Problem in the Scheduling of Television Commercials By Giovanni Giallombardo; Giovanna Miglionico; Houyuan Jiang
  10. Stochastic Analysis of Margin Protection (MP) Crop Insurance in Arkansas Rice Production By Mane, Ranjitsinh; Watkins, Bradley

  1. By: Xiao-Guang Yue (School of Civil Engineering Wuhan University, China); Rui Gao (School of Civil Engineering Wuhan University, China); Michael McAleer (Department of Quantitative Finance National Tsing Hua University, Taiwan)
    Abstract: In order to study the dynamic changes in gas concentration, to reduce gas hazards, and to protect and improve mining safety, a new method is proposed to predict gas concentration. The method is based on the opposite degree algorithm. Priori and posteriori values, opposite degree computation, opposite space, prior matrix, and posterior matrix are 6 basic concepts of opposite degree algorithm. Several opposite degree numerical formulae to calculate the opposite degrees between gas concentration data and gas concentration data trends can be used to predict empirical results. The opposite degree numerical computation (OD-NC) algorithm has greater accuracy than several common prediction methods, such as RBF (Radial Basis Function) and GRNN (General Regression Neural Network). The prediction mean relative errors of RBF, GRNN and OD-NC are 7.812%, 5.674% and 3.284%, respectively. Simulation experiments shows that the OD-NC algorithm is feasible and effective.
    Keywords: Gas concentration, Opposite degree algorithm, Data prediction, Mining safety, Numerical simulations.
    JEL: C53 C63 L71
    Date: 2016–04
  2. By: Troost, Christian; Berger, Thomas
    Abstract: In combination with crop growth models, farm-level models allow an in-depth, process-based analysis of farmer adaptation to climate change and agricultural policy. Evaluated for all farms in an area and extended by interactions, farm-level models become agent-based models that allow simulating aggregate regional production and structural change. Confined to a local or regional scope, however, they cannot directly incorporate price feedbacks that play out at global scale. In this contribution, we use experimental designs to evaluate a non-connected agent-based model for the full space of potential future price developments. We discuss and compare the use of standard regression analysis and non-parametric, automatic methods (MARS and Kriging) to summarize supply behavior over the simulated price ranges. Estimated supply functions constitute a surrogate model for the original agent-based model and could be used to iterate detailed regional analysis with national or global market models in an efficient way.
    Keywords: Agribusiness, International Development,
    Date: 2015
  3. By: Tabeau, Andrzej; van Meijl, Hans; Overmars, Koen P.; Stehfest, Elke
    Abstract: The REDD policy which preserves, enables substantial emission reductions. Since agricultural production and area expansion is a primary driver of tropical deforestation, REDD policies might limit the expansion possibilities of agricultural land use and therefore influence competitiveness, agricultural prices, trade, production and food security the world. This paper studies the impact of REDD policies on the agri-food sector and food security with a global CGE model called MAGNET. It focuses on the restrictions on agricultural land expansion within the REDD policy package. Simulation results show that REDD policies start to affect the agri-food sector in some lower developed countries if more than 15% of potentially available agricultural areas are protected from deforestation. A stringent REDD policy that protects 90% of land reserves that could potentially be used for agriculture production results in a global real agricultural price increase of almost 6%, and a worldwide agricultural production decrease of 1.5%.
    Keywords: REDD, deforestation, land supply, agricultural prices and production, scenarios, Environmental Economics and Policy, Food Security and Poverty, D58, O13, O50, Q11, Q18,
    Date: 2015
  4. By: Sene, Ligane Massamba; Badiane, Ousmane
    Abstract: This paper analyses the relationship between health expenditures and productivity in Senegal by using a dynamic recursive Computable General Equilibrium (CGE) model that has been run from 2011 to 2020. This model links the growth rate of agricultural productivity to household investment in health goods taking into account catastrophic health payments considered as barriers to achieve maximal productivity gains. In fact, despite being a potential catalyst for productivity, out-of-pocket health expenditures can be a burden after a critical threshold has been crossed, and might potentially decrease household resources and place constraints on the productivity generating process. Results show a positive impact on poverty reduction when the Government reduces the burden on households by financing catastrophic payment overshoots. Lower health costs also appear to improve households’ well-being, especially in the case of agricultural households. These results suggest the need for policies which will reduce the health system’s reliance on out-of-pocket payments and demonstrate that health programs should reach the most vulnerable households. The effectiveness of poverty-oriented interventions can be increased by targeting households incurring catastrophic health expenditures.
    Keywords: agricultural productivity, health, poverty, out-of-pocket health expenditures, Senegal, Agribusiness, Agricultural and Food Policy, Consumer/Household Economics, Q12, I130, I320,
    Date: 2015
  5. By: Debra Hevenstone; Ben Jann
    Abstract: We construct an empirically informed computational model of fiscal federalism, testing whether horizontal or vertical equalization can solve the fiscal externality problem in an environment in which heterogeneous agents can move and vote. The model expands on the literature by considering the case of progressive local taxation. Although the consequences of progressive taxation under fiscal federalism are well understood, they have not been studied in a context with tax equalization, despite widespread implementation. The model also expands on the literature by comparing the standard median voter model with a realistic alternative voting mechanism. We find that fiscal federalism with progressive taxation naturally leads to segregation as well as inefficient and inequitable public goods provision while the alternative voting mechanism generates more efficient, though less equitable, public goods provision. Equalization policy, under both types of voting, is largely undermined by micro-actors' choices. For this reason, the model also does not find the anticipated effects of vertical equalization discouraging public goods spending among wealthy jurisdictions and horizontal encouraging it among poor jurisdictions. Finally, we identify two optimal scenarios, superior to both complete centralization and complete devolution. These scenarios are not only Pareto optimal, but also conform to a Rawlsian view of justice, offering the best possible outcome for the worst-off. Despite offering the best possible outcomes, both scenarios still entail significant economic segregation and inequitable public goods provision. Under the optimal scenarios agents shift the bulk of revenue collection to the federal government, with few jurisdictions maintaining a small local tax.
    Keywords: Fiscal Federalism, Equalization Grants, Computational Modeling, Tiebout Sorting, Theory of Justice, Multi-community model
    JEL: C63 D63 H21 H23 H3 H71
    Date: 2016–04–12
  6. By: Baştürk N.; Grassi S.; Hoogerheide L.; Dijk H.K. van (GSBE)
    Abstract: This paper presents the parallel computing implementation of the MitISEM algorithm, labeled Parallel MitISEM. The basic MitISEM algorithm, introduced by Hoogerheide et al. 2012, provides an automatic and flexible method to approximate a non-elliptical target density using adaptive mixtures of Student-t densities, where only a kernel of the target density is required. The approximation can be used as a candidate density in Importance Sampling or Metropolis Hastings methods for Bayesian inference on model parameters and probabilities. We present and discuss four canonical econometric models using a Graphics Processing Unit and a multi-core Central Processing Unit version of theMitISEM algorithm. The results show that the parallelization of the MitISEM algorithm on Graphics Processing Units and multi-core Central Processing Units is straightforward and fast to program using MATLAB. Moreover the speed performance of the Graphics Processing Unit version is much higher than the Central Processing Unit one.
    Keywords: Bayesian Analysis: General; Estimation: General; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Multiple or Simultaneous Equation Models: Instrumental Variables (IV) Estimation;
    JEL: C11 C13 C36 C32
    Date: 2016
  7. By: Rao, R. Kavita (National Institute of Public Finance and Policy); Tandon, Suranjali (National Institute of Public Finance and Policy)
    Abstract: The paper presents a model for tax compliance based on prospect theory wherein an individual makes the decision whether to file, and declare a certain amount of income, or to not file based on a set of policy parameters as well as his/her preferences. The paper poses the question- at what incomes would individuals choose to file a return and answers the same using a model based on prospect theory. Further, simulations are presented to illustrate the impact of changes in tax rates, penalty and audit probability on the individual's preference to file. The results from the simulation show that for different values of policy parameters there exists crossover income at which individuals would choose to file a return. Given all else, at the exemption threshold of 0.1 million, individuals would choose to file a return at incomes greater than or equal to 0.6 million.
    Keywords: prospect theory ; compliance ; tax ; exemption threshold ; crossover income
    JEL: H26 H31 D11 K42
    Date: 2016–04
  8. By: Zavale, Helder; Myers, Robert; Tschirley, David
    Abstract: This paper assesses the impact of local and regional procurement (LRP) of food aid on local market prices in Africa. In particular we study maize in Uganda and Mozambique and beans in Ethiopia. Two complementary modelling approaches are employed: a vector autoregression (VAR) and a computational model (CM). The VAR is a reduced-form econometric approach while the CM is a structural simulation approach. Using two different approaches provides a useful consistency check. Results from the VAR show average price increases brought about by LRP are statistically significant and range from 2% to 16%. The size of the average estimated price effects are economically meaningful for maize in Uganda but much smaller (though still statistically significant) for maize in Mozambique and beans in Ethiopia. In all three country applications, LRP is estimated to have no effect on price variability. Results from the CM fall within a 90% confidence bound around results obtained from the VAR.
    Keywords: Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Development,
    Date: 2015
  9. By: Giovanni Giallombardo; Giovanna Miglionico (Dipartimento di Ingegneria Informatica, Modellistica, Elettronica e Sistemistica, Universita della Calabria); Houyuan Jiang (Cambridge Judge Business School, University of Cambridge)
    Abstract: We consider the conflict-resolution problem arising in the allocation of commercial advertisements to television program breaks. Due to the competition-avoidance requirements issued by advertisers, broadcasters aim to allocate any pairs of commercials promoting highly conflicting products to different breaks. Hence, the problem consists of assigning commercials to breaks, subject to time capacity constraints, with the aim of maximizing a total measure of the conflicts among commercials assigned to different breaks. Since the existing reformulation can hardly be solved via exact methods, we introduce three new and efficient (mixed-)integer programming reformulations of the problem. Our computational study is based on two sets of test problems, one from the literature and another that we generate. Numerical results show the excellent performance of the proposed reformulations in terms of solution quality and computation times, when compared against an existing reformulation and an effective heuristic approach. We also provide theoretical evidences to demonstrate why some of our new reformulations should outperform the existing reformulation.
    Keywords: television advertising, conflict resolution problem, integer programming
    Date: 2015–09
  10. By: Mane, Ranjitsinh; Watkins, Bradley
    Abstract: Rice is an irrigated crop, and irrigated crops are more insulated against yield risk than non-irrigated crops. However, rice is largely dependent on energy related inputs like fuel and fertilizer and suffers from systemic risks caused by increasing energy related input costs. The USDA Risk Management Agency (RMA) is making available a new insurance product to rice producers in 2016 called Margin Protection (MP). Margin Protection provides coverage against an unexpected decrease in operating margin resulting from increased input costs. Thls study used simulation to evaluate stochastic indemnities generated by MP at various coverage levels ranging from 70 to 90 percent for three major rice counties in Arkansas. Multivariate empirical distributions of county yields, margin rice prices and prices for allowed margin inputs were simulated. The likelihood of receiving indemnities under MP was small for 70 and 75 percent coverage levels based on our simulated results. Indemnity probabilities were 0.8, 5.2, and 18 percent for Arkansas County at MP coverage levels of 80, 85, and 95 percent, respectively. Indemnity probabilities for Poinsett and Desha Counties were higher at the 80, 85, and 90 percent MP coverage levels (6, 18.8, and 31.9 percent respectively for Poinsette; 6.6, 16.8, and 34.6 percent respectively for Desha). The higher probabilities of indemnities in Poinsett and Desha counties may be due to higher variability in yields for those counties.
    Keywords: Margin Protection, Indemnity, Price Risk, Risk Management, Price Volatility, Crop Production/Industries, Risk and Uncertainty, Q11, Q13, Q14, Q16,
    Date: 2016

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