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i Improving Information for Social Policy Decisions The Uses of Microsimulation Modeling VOLUME II TECHNICAL PAPERS Constance F.Citro and Eric A.Hanushek, Editors Panel to Evaluate Microsimulation Models for Social Welfare Programs Committee on National Statistics Commission on Behavioral and Social Sciences and Education National Research Council National Academy Press Washington, D.C. 1991
ii NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose mem- bers are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This report has been reviewed by a group other than the authors according to procedures approved by a Report Review Committee con- sisting of members of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engi- neering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Frank Press is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineer- ing programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Robert M.White is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility give n to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initia- tive, to identify issues of medical care, research, and education. Dr. Stuart Bondurant is acting president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of sci- ence and technology with the Academy's purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Frank Press and Dr. Robert M.White are chairman and vice chairman, respectively, of the National Research Council. The project that is the subject of this report was supported by funds from the Office of the Assistant Secretary for Planning and Evalua- tion, U.S. Department of Health and Human Services, and the Food and Nutrition Service of the U.S. Department of Agriculture. Library of Congress Catalog Card No. 91â62261 International Standard Book Number 0-309-04542-8 Additional copies of this report are available from: National Academy Press 2101 Constitution Avenue, NW Washington, DC 20418 S401 Printed in the United States of America
iii PANEL TO EVALUATE MICRO SIMULATION MODELS FOR SOCIAL WELFARE PROGRAMS ERIC A.HANUSHEK (Chair), Department of Economics, University of Rochester DAVID M.BETSON, Department of Economics, University of Notre Dame LYNNE BILLARD, Department of Statistics, University of Georgia SHELDON DANZIGER, Institute of Public Policy Studies, University of Michigan EUGENE P.ERICKSEN, Department of Sociology, Temple University THOMAS J.ESPENSHADE, Office of Population Research, Princeton University HARVEY GALPER, KPMG Peat Marwick, Washington, D.C. LOUIS GORDON, Department of Mathematics, University of Southern California KEVIN M.HOLLENBECK, W.E. Upjohn Institute for Employment Research, Kalamazoo, Mich. GORDON H.LEWIS, School of Urban and Public Affairs, Carnegie Mellon University ROBERT MOFFITT, Department of Economics, Brown University GAIL R.WILENSKY, Health Care Financing Administration, U.S. Department of Health and Human Services, Washington, D.C.* MICHAEL C.WOLFSON, Analytical Studies Branch, Statistics Canada CONSTANCE F.CITRO, Study Director MICHAEL L.COHEN, Consultant CHRISTINE M.ROSS, Research Associate AGNES E.GASKIN, Administrative Secretary *Served until January 1990
iv COMMITTEE ON NATIONAL STATISTICS BURTON H.SINGER (Chair), Department of Epidemiology and Public Health, Yale University NORMAN M.BRADBURN, National Opinion Research Center, University of Chicago RONALD S.BROOKMEYER, Department of Biostatistics, Johns Hopkins University MARTIN H.DAVID, Department of Economics, University of Wisconsin ANGUS S.DEATON, Woodrow Wilson School of Public and International Affairs, Princeton University CLAUDIA D.GOLDIN, Department of Economics, Harvard University LOUIS GORDON, Department of Mathematics, University of Southern California ROBERT M.HAUSER, Department of Sociology, University of Wisconsin GRAHAM KALTON, Survey Research Center, Institute for Social Research, University of Michigan WILLIAM A.MORRILL, Mathtech, Inc., Princeton, New Jersey DOROTHY P.RICE, Department of Social and Behavioral Sciences, School of Nursing, University of California, San Francisco JOHN E.ROLPH, The RAND Corporation, Santa Monica, California DONALD B.RUBIN, Department of Statistics, Harvard University KENNETH W.WACHTER, Department of Statistics, University of California, Berkeley MIRON L.STRAF, Director FLORENCE E.WOLF, Administrative Assistant
CONTENTS v Contents Contents of Volume I vii Introduction 1 Constance F.Citro DATABASES AND METHODS OF DATA ENHANCEMENT 1 Databases for Microsimulation: A Comparison of the March CPS and SIPP 11 Constance F.Citro 2 Statistical Matching and Microsimulation Models 62 Michael L.Cohen MODEL DESIGN 3 Alternative Model Designs: Program Participation Functions and the Allocation of Annual to 89 Monthly Values in TRIM2, MATH, and HITSM Constance F.Citro and Christine M.Ross 4 DYNASIM2 and PRISM: Examples of Dynamic Modeling 121 Christine M.Ross
CONTENTS vi COMPUTING TECHNOLOGY 5 Future Computing Environments for Microsimulation Modeling 141 Paul Cotton and George Sadowsky MODEL VALIDATION 6 Variance Estimation of Microsimulation Models Through Sample Reuse 237 Michael L.Cohen 7 Evaluations of Microsimulation Models: Literature Review 255 Michael L.Cohen 8 A Validation Experiment With TRIM2 276 Michael L.Cohen, Lynne Billard, David M.Betson, and Eugene P.Ericksen 9 Evaluating the Accuracy of U.S. Population Projection Models 305 Laurence Grummer-Strawn and Thomas J.Espenshade MODEL DOCUMENTATION 10 Documentation for Microsimulation Models: A Review of TRIM2, MATH, and HITSM 333 Kevin M.Hollenbeck
VOLUME I: REVIEW AND RECOMMENDATIONS vii Contents Volume I: Review and Recommendations Summary 1 Introduction PART I INFORMATION FOR SOCIAL WELFARE POLICY: TOWARD A SECOND REVOLU- TION 2 The Search for Useful Information 3 Improving the Tools and Uses of Policy Analysis Appendix: Models, Uncertainty, and Confidence Intervals PART II THE ROLE OF MICROSIMULATION AS A POLICY ANALYSIS TOOL 4 Microsimulation Models: Then and Now 5 Databases for Microsimulation 6 Model Design and Development 7 Computing Technology and Microsimulation 8 Microsimulation Modeling of Health Care, Retirement Income, and Tax Policies
VOLUME I: REVIEW AND RECOMMENDATIONS viii 9 Validation 10 Documentation and Archiving 11 The Microsimulation Modeling Community Appendix: Microsimulation Models, Databases, and Modeling Terms Glossary of Acronyms References Biographical Sketches of Panel Members and Staff