Q1). Utilities of microsimulation for policy development lies in their ability to do what? Please identify and provide a short and specific narrative to support your response to the question above.
Q2). Looking through the chapter, the authors have identified five non-sequential and unique steps that must be followed when building a microsimulation model (Caro et al., 2012; Cassells et al., 2006; Zaidi and Rake, 2001).
What are these five steps? Please identify and name them and provide a brief and short narrative for each step.
Chapter 14 – Provided us with a brief introduction to the method of microsimulation that was introduced in the 1950s, and its utility for the development of public policy. On the same token, the authors stated that, microsimulation’s use for policy purposes has extended from the economic to other domains due to robust and abundances of data and technological advances. From this revelation, we can state with the certainty that microsimulation as a utility has seen growing demand in recent times to address increasingly complex policy issues that require new approaches.
According to the authors, Lay-Yee and Cotterell, microsimulation may come in various types, for example along the dimensions of arithmetical or behavioral, and static or dynamic. It has its own distinctive model-building process that relies on empirical data and derived parameters with an insertion of the chance to simulate realistic distributions.