Improving Information for Social Policy Decisions -- The Uses of Microsimulation Modeling: Volume II, Technical Papers (1991)
Chapter: Nature of the Demand for Microanalytic Simulation Models
an investment strategy that will allow us to approach this environment intelligently and to fashion effective systems for supporting the overall social science research and policy analysis community.
FUTURE PROSPECTS FOR SOCIOECONOMIC MICROANALYTIC SIMULATION MODELS
Future prospects for socioeconomic microanalytic simulation modeling as an analytic technique depend on both demand and supply considerations. The demand for such models arises mainly from real world issues of substance, policy, and administration. The supply of such models is limited by the amount of substantive knowledge available for model construction and the ability to construct computer-based systems that support model construction and execution in an affordable and easy-to-use manner.52
Nature of the Demand for Microanalytic Simulation Models
Understanding the nature of the demand for microsimulation modeling techniques requires an understanding of the context in which such models are used and the services they perform.
The birth of computer-based microanalytic simulation models was accompanied by substantial optimism regarding the power and applicability of the new methodology. However, the potential foreseen by Orcutt in 1961 has by and large not been realized. In part, the difficulty of obtaining appropriate substantive knowledge in many areas of social science and using it to craft robust operating characteristics that capture behavioral phenomena was initially underestimated. Second, social science research was considered respectable and increasingly important in the United States in the early 1960s, and funding for it increased substantially almost to the end of the decade. Disillusionment with large-scale social science research and experimentation grew in the 1970s and has persisted, and this has substantially reduced the level of federal support for such research. As a result, support for social research gravitated to program areas in which microsimulation was used more as a framework for direct estimation of specific policy alternatives rather than more fundamental research in the construction, implementation, dynamics, and potential of such modeling as a basic tool.
Given this shift in emphasis, microanalytic simulation models have tended to remain focused on tax and transfer policy alternatives, a relatively deterministic area in which significant initial success was achieved. Further, the
