nep-cmp New Economics Papers
on Computational Economics
Issue of 2017‒01‒01
thirteen papers chosen by
Stan Miles
Thompson Rivers University

  1. A branch-and-price algorithm for parallel machine scheduling using ZDDs and generic branching By Daniel Kowalczyk; Roel Leus
  2. How Fundamentalism Takes Root: A Simulation Study By Friedman, Daniel.; Fan, Jijian.; Jonathan Gair; Sriya Iyer; Bartosz Redlicki; Chander Velu
  3. Agent-based Model for Spot and Balancing Electricity Markets By Florian K\"uhnlenz; Pedro H. J. Nardelli
  4. Putting Subjective Well-being to Use for Ex-ante Policy Evaluation By Jara Tamayo, Holguer Xavier; Schokkaert, Erik
  5. Conversion of regional data between NUTS classifications. Adapting the RHOMOLO database to different uses By Montserrat López-Cobo
  6. Regionalisation of Social Accounting Matrices for the EU-28 in 2010. A regional database for RHOMOLO at NUTS 2 level By Montserrat López-Cobo
  7. Two-level designs constructed by concatenating orthogonal arrays of strenght three By VÁZQUEZ-ALCOCER, Alan; GOOS, Peter; SCHOEN, Eric D.
  8. Comparing budget repair measures for a small open economy with growing debt By George Kudrna; Chung Tran
  9. Automated Economic Reasoning with Quantifier Elimination By Casey B. Mulligan
  10. Climate Change, Water Scarcity in Agriculture and the Economy-Wide Impacts in a CGE Framework By Ponce, Roberto; Parrado, Ramiro; Stehr, Alejandra; Bosello, Francesco
  11. A Generalized Population Dynamics Model of a City and an Algorithm for Engineering Regime Shifts By James PL Tan
  12. Implications for fisheries management by inclusion of marine ecosystem services By Lars Ravensbeck; Ayoe Hoff; Hans Frost
  13. Predicting housing prices with Google searches in Finland By Widgrén, Joona

  1. By: Daniel Kowalczyk; Roel Leus
    Abstract: We study the parallel machine scheduling problem to minimize the sum of the weighted completion times of the jobs to be scheduled (problem P m||P wjCj in the standard three-field notation). We use the set covering formulation that was introduced by van den Akker et al. (1999) for this problem, and we improve the computational performance of their branch-and-price (B&P) algorithm by a number of techniques, including a different generic branching scheme, zero-suppressed binary decision diagrams (ZDDs) to solve the pricing problem, dual-price smoothing as a stabilization method, and Farkas pricing to handle infeasibilities. We report computational results that show the effectiveness of the algorithmic enhancements, which depends on the characteristics of the instances. To the best of our knowledge, we are also the first to use ZDDs to solve the pricing problem in a B&P algorithm for a scheduling problem.
    Keywords: Parallel machine scheduling, Weighted completion times, Branch and price, ZDD, Stabilization
    Date: 2016–12
  2. By: Friedman, Daniel.; Fan, Jijian.; Jonathan Gair; Sriya Iyer; Bartosz Redlicki; Chander Velu
    Abstract: We report agent-based simulations of religiosity dynamics in a spatially dispersed population. Agents' religiosity responds to neighbours via pairwise interactions as well as via club goods effects. A simulation run is deemed fundamentalist if the final distribution contains a sizable minority of very high religiosity together with a majority of lesser religiosity. Such simulations are more prevalent when parameter values shift from values reflecting traditional societies towards values reflecting the modern world. The simulations suggest that the rise of fundamentalism in the modern world is boosted by greater real income, lower relative prices for secular goods, less substitutability between religious and secular goods, and less time spent with neighbours. Surprisingly, the simulations suggest little role for the rise of long distance communication and transportation.
    Keywords: fundamentalism, club goods, agent-based models
    JEL: Z12 D79 D85 H49
    Date: 2016–12–19
  3. By: Florian K\"uhnlenz; Pedro H. J. Nardelli
    Abstract: We present a simple, yet realistic, agent-based model of an electricity market. The proposed model combines the spot and balancing markets with a resolution of one minute, which enables a more accurate depiction of the physical properties of the power grid. As a test, we compare the results obtained from our simulation to data from Nord Pool.
    Date: 2016–12
  4. By: Jara Tamayo, Holguer Xavier; Schokkaert, Erik
    Abstract: Most studies using microsimulation techniques have considered the effect of potential reforms, but only regarding income distribution. However, it has become increasingly recognised, both at the academic and political level, that focusing purely on income provides a limited picture of social progress. We illustrate how ex-ante policy evaluation can be performed in terms of richer concepts of individual well-being, such as subjective life satisfaction and equivalent incomes. Our analysis makes use of EUROMOD, the EU-wide tax-benefit microsimulation model, along with 2013 EUSILC data for Sweden, which for the first time provides information on subjective wellbeing. Our results show that the effect of potential reforms varies widely depending on the well-being concept used in the evaluation. We discuss the normative questions that are raised by this finding.
    Date: 2016–12–19
  5. By: Montserrat López-Cobo (European Commission – JRC)
    Abstract: This technical report presents the methodology followed to transform regional data between different NUTS classifications in RHOMOLO, the regional computable general equilibrium model developed by the European Commission to evaluate the impact of Cohesion Policy. This method has been designed for the conversion between NUTS 2006 and NUTS 2010 in both directions, but the same philosophy could be extended to transform data between any pair of NUTS classifications. It has been applied to the construction of two regional databases for RHOMOLO-v2 in 2010, one covering the EU-27 regions according to NUTS 2006, the other for the EU-28 regions according to NUTS 2010.
    Keywords: NUTS, EU-28, regional database
    JEL: D57 E16 R10
    Date: 2016–12
  6. By: Montserrat López-Cobo (European Commission – JRC)
    Abstract: This paper presents the regionalisation methodology followed to build a regional database for RHOMOLO, the regional computable general equilibrium model developed by the European Commission to evaluate the impact of Cohesion Policy. This report describes the methodology used to develop two sets of regional Social Accounting Matrices for the EU-28 at NUTS 2 level, according to both the NUTS 2006 and the NUTS 2010 classifications. The starting point is the set of national SAMs developed for the model by à lvarez-Martínez and López-Cobo (2016). The national SAMs are subsequently regionalised by means of non-survey techniques using the available regional statistical data from Eurostat, inter-regional bilateral trade flows developed ad hoc for this project and inter-regional transport cost data from the TRANSTOOLS project. The initial regional data prepared for RHOMOLO v2 included only the EU-27 and NUTS 2006, but following the adhesion of Croatia to the European Union on January 1st 2013, in this paper we also include a national SAM and two regional SAMs for Croatia.
    Keywords: social accounting matrices, regional database, EU-28
    JEL: D57 E16 R12 R13
    Date: 2016–12
  7. By: VÁZQUEZ-ALCOCER, Alan; GOOS, Peter; SCHOEN, Eric D.
    Abstract: Two-level orthogonal arrays of N runs, k factors and a strength of 3 provide suitable fractional factorial designs in situations where many of the main effects are expected to be active, as well as some two-factor interactions. If constructed using the fold-over technique, these designs are called even and allow at most N/2 - 1 interactions to be estimated. For k 48, we develop an algorithm for an optimal concatenation of strength-3 designs involving N/2 runs. Our approach involves column permutations of one of the concatenated designs, as well as sign switches of the elements of one or more columns of that design. We illustrate the potential of the algorithm by generating two-level even-odd designs with 64, 80, 96, 112 and 128 runs involving up to 33 factors. To the best of our knowledge, our designs with 80 and 96 runs involving fewer than 21 and 25 factors, respectively, are novel, just like our 112-run designs involving up to 29 factors. Our even-odd designs outperform or are competitive with the best known designs in terms of the aliasing of two-factor interactions and in terms of the number of estimable two-factor interactions.
    Keywords: Even-odd design, Generalized aberration, Local search, Second-order saturated, Two-factor interaction, Variable neighborhood search
    Date: 2016–10
  8. By: George Kudrna; Chung Tran
    Abstract: In this study, we quantify the macroeconomic and welfare effects of alternative fiscal consolidation plans in the context of a small open economy. Using a computable overlapping generations model tailored to the Australian economy, we examine immediate and gradual eliminations of the existing fiscal deficit with (i) temporary income tax hikes, (ii) temporary consumption tax hikes and (iii) temporary transfer payment cuts. The simulation results indicate that all three examined fiscal measures result in favourable long-run macroeconomic and welfare outcomes, but have adverse consequences in the short run that are particularly severe under the immediate fiscal consolidation plan. Moreover, our results show that cutting transfer payments leads to the worst welfare outcome for all generations currently alive, and especially the poor. Increasing the consumption tax rate results in smaller welfare losses, but compared to raising income taxes, the current poor households pay much larger welfare costs. Overall, the welfare trade-offs between current and future generations, as well as between the rich and poor, highlight key political constraints and point to challenging policy choices for the wellbeing of future generations.
    Keywords: Fiscal Deficit, Public Debt, Fiscal Consolidation, Welfare, Dynamic General Equilibrium, Small Open Economy
    JEL: C68 E21 E63 H31 H60 J26
    Date: 2016–12
  9. By: Casey B. Mulligan
    Abstract: Many theorems in economics can be proven (and hypotheses shown to be false) with “quantifier elimination.” Results from real algebraic geometry such as Tarski’s quantifier elimination theorem and Collins’ cylindrical algebraic decomposition algorithm are applicable because the economic hypotheses, especially those that leave functional forms unspecified, can be represented as systems of multivariate polynomial (sic) equalities and inequalities. The symbolic proof or refutation of economic hypotheses can therefore be achieved with an automated technique that involves no approximation and requires no problem-specific information beyond the statement of the hypothesis itself. This paper also discusses the computational complexity of this kind of automated economic reasoning, its implementation with Mathematica and REDLOG software, and offers several examples familiar from economic theory.
    JEL: B41 C63 C65
    Date: 2016–12
  10. By: Ponce, Roberto; Parrado, Ramiro; Stehr, Alejandra; Bosello, Francesco
    Abstract: This paper analyzes the economic impacts of changes in water availability due to climate change. We develop a new modeling approach as an alternative to include water as a production factor within a global CGE model. We tailor the structure of the ICES model to characterize the key features of the world economy with a detailed representation of the agricultural sector. In order to reach this objective, a new database has been built to explicitly consider water endowments, precipitation changes, and unitary irrigation costs. Results suggest different economic consequences of climate change depending on the specific region. Impacts are related to change in crop production, endowment demands, and international trade.
    Keywords: CGE Models, Climate Change, Agriculture, Irrigation, Water Resources, Environmental Economics and Policy, C68, Q54, Q15, Q25,
    Date: 2016–12–23
  11. By: James PL Tan
    Abstract: Measures of wealth and production have been found to scale superlinearly with the population of a city. Therefore, it makes economic sense for humans to congregate together in dense settlements. A recent model of population dynamics showed that population growth can become superexponential due to the superlinear scaling of production with population in a city. Here, we generalize this population dynamics model and demonstrate the existence of multiple stable equilibrium points, showing how population growth can be stymied by a poor economic environment. This occurs when the goods and services produced by the city become less profitable due to a lack of diversification in the city's economy. Then, relying on critical slowing down signals related to the stability of an equilibrium point, we present an algorithm for engineering regime shifts such that a city at a stable equilibrium point may continue to grow again. The generality of the model and the algorithm used here implies that the model and algorithm need not be restricted to urban systems; they are easily applicable to other types of systems where the assumptions used are valid.
    Date: 2016–12
  12. By: Lars Ravensbeck; Ayoe Hoff (Department of Food and Resource Economics, University of Copenhagen); Hans Frost (Department of Food and Resource Economics, University of Copenhagen)
    Abstract: The application of ecosystem based management of the marine resources and focus on ecosystem services will influence the methodologies used for assessing the resources as well as the proposed regulation of the fisheries and other marine resources. The paper makes a review of ecosystem services and ecosystem based fishery management with the purpose of integrating these elements in a bioeconomic model. As a part of the model development, a logistic predator-prey model is examined thoroughly. On this basis, a numerical model is created. The model can include several species at different trophic layers, hence simulation a small food web. The key purpose of the numerical analysis is to develop a practical tool that can assess the management policies when a broader range of ecosystem services, species interactions and externalities are taken into account. The model can include several species at different trophic layers and, hence, simulate a small food web, while at the same time assess the economic effects of fishing on this food web. In general, the analyses indicate that species modelled with interaction may sustain less fishing pressure than if they are modelled without species interaction. Besides interaction, the numerical model assesses how the economic result is affected by the inclusion of ecosystem services. This is done through the damage cost functions, which depends on effort and reduces the net value, and a set of non-market values, which are functions that depend on the stock of the species. The inclusion of these tends to favour reduction in effort levels, in some cases quite significantly. Management policies based on conventional MEY targets may in many cases rather well accommodate the broader range of ecosystem-based policy goals, due to the lower effort levels. The paper shows the shortcomings of conventional qualitative analytical approaches because of the complexities of marine ecosystems. Numerical models also show shortcomings, in particular because specific functional forms are used and data are short in many areas. However, it is shown that much insight can be gained from using such relatively simple models.
    Keywords: bioeconomics, ecosystem modelling, ecosystem based fisheries management
    JEL: Q22 Q57
    Date: 2016–11
  13. By: Widgrén, Joona
    Abstract: This report examines whether Google search queries can be used to predict the present and the near future house prices in Finland. Compared to a simple benchmark model, Google searches improve the prediction of the present house price index by 7.5 % measured by mean absolute error. In addition, search queries improve the forecast of near future house prices. Predicting the present and near future house prices is relevant information to many agents, such as realtors and political decision makers.
    Keywords: Google Trends, Internet, nowcasting, forecasting, housing market, time series
    JEL: C1 C22 C43 C53 C82 E27
    Date: 2016–12–14

This nep-cmp issue is ©2017 by Stan Miles. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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