On linking microsimulation and computable general equilibrium models using exact aggregation of heterogeneous discrete-choice making agents

C-Tier
Journal: Economic Modeling
Year: 2009
Volume: 26
Issue: 3
Pages: 560-570

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Our paper contributes by bridging the gap between the (partial equilibrium) microsimulation and the computable general equilibrium (CGE) approaches, by making use of exact aggregation results from the discrete choice literature: heterogeneous individuals choosing within a set of discrete alternatives may be aggregated into a representative agent with (possibly multiple-level) constant elasticity-of-substitution/transformation preferences/technologies. These results therefore provide a natural link between the two policy evaluation approaches. We illustrate the usefulness of these results by evaluating potential effects of population ageing on the dynamics of income distribution and inequalities, using a simple overlapping generations model where individuals make leisure/work decisions, and choose a profession among a discrete set of alternatives.

Technical Details

RePEc Handle
repec:eee:ecmode:v:26:y:2009:i:3:p:560-570
Journal Field
General
Author Count
2
Added to Database
2026-01-25