Microsimulation -- A survey of principles, developments and applications

Abstract This paper surveys microsimulation as an instrument to analyze and forecast the individual impacts of economic and social policies. The basic principles of microsimulation, which is a tool for practical policy advising as well as for research and teaching, are pointed out and the static and dynamic (cross-section and longitudinal) approaches are compared to one another. Present and past developments of microsimulation models — with emphasis on the static version — and their areas of application are reviewed, focusing on the us and Europe as leaders in this field. The requirement profile and components of a static microsimulation model are discussed. To illustrate the mechanisms involved in a microsimulation model, the paper concludes with a concrete example: the Static Sfb 3 Microsimulation Model based on a relational database system.

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