Agent based modelling as a decision support system for shadow accounting

We propose the use of agent based modelling to create a shadow account, that is, a secondary account of a business which is used to audit or verify the primary ac¬count. Such a model could be used to test the claims of industries and businesses. For example, the model could determine whether a business is generating enough funds to pay minimum wage. Parameters in the model can be set by observation or a range of values can be tested to determine points at which enough revenue could be generated. We illustrate the potential of agent based modelling as a tool for shadow accounting with a case study of a car wash business

The agricultural policy simulator (AgriPoliS): an agent-based model to study structural change in agriculture (Version 1.0)

A central criticism common to agricultural economic modelling approaches for policy analysis is that they do not adequately take account of a number of characteristic factors of the agricultural sector. This concerns aspects like the immobility of land, heterogeneity of farms, interactions between farms, space, dynamic adjustment processes as well as dynamics of structural change. In brief, modelling the complexity of the system has not been at the centre of interest. In terms of modelling complex economic systems, an agent-based modelling approach is a suitable approach to quantitatively model and understand such systems in a more natural way. In the same way, this applies to the modelling of agricultural structures. In particular, agent-based models of agricultural structures allow for carrying out computer experiments to support a better understanding of the complexity of agricultural systems, structural change, and endogenous adjustment reactions in response to a policy change. This paper presents the agent-based model AgriPoliS (Agricultural Policy Simulator) which simultaneously considers a large number of individually acting farms, product markets, investment activity, as well as the land market, and a simple spatial representation. The ultimate objective of AgriPoliS is to study the interrelationship of rents, technical change, product prices, investments, production and policies, structural effects resulting from these, the analysis of the winners and losers of agricultural policy as well as the costs and efficiency of various policy measures. -- G E R M A N V E R S I O N: Ein oft genannter Kritikpunkt an vielen agrarökonomischen Politikanalysemodellen ist, dass diese nur ungenügend Bezug nehmen auf Aspekte wie die Immobilität von Boden, Heterogenität der Akteure, Interaktionen zwischen Betrieben, räumliche Bezüge, dynamische Anpassungsprozesse und Strukturwandel. Kurz, die Modellierung komplexer Wirkungszusammenhänge steht weniger oder nicht im Zentrum des Interesses. Agentenbasierte Modelle stellen einen Weg dar, das Verständnis komplexer ökonomischer Zusammenhänge zu verbessern bzw. zu quantifizieren. Insbesondere erlauben sie die Durchführung von einer Vielzahl von Computerexperimenten, mit denen Fragestellungen wie der Zusammenhang zwischen Politikmaßnahmen und Strukturwandel untersucht werden können. Basierend darauf, stellt dieser Beitrag das agentenbasierte Modell AgriPoliS (Agricultural Policy Simulator) vor. AgriPoliS ist ein räumlich-dynamisches Modell einer Agrarstruktur, in dem eine Vielzahl individuell abgebildeter landwirtschaftlicher Unternehmen in einer vereinfacht dargestellten Agrarregion agiert und beispielsweise um begrenzt verfügbare landwirtschaftliche Flächen konkurriert.Agent-based systems,Multi-agent systems,Policy analysis,Structural change,Simulation,Agentenbasierte Systeme,Politikanalyse,Multi-Agentensysteme,Strukturwandel,Simulation

RECENT DEVELOPMENTS IN EU POLICIES – CHALLENGES FOR PARTIAL EQUILIBRIUM MODELS

This paper gives an overview on current and prospective modelling challenges for agricultural partial equilibrium (PE) models focussing on EU policies. Starting from a certain policy context, the paper highlights the current capabilities and limitations of existing PE models and, if available, develops some ideas on future modelling directions to advance the usefulness of quantitative information provided.Policy impact assessment, agricultural partial equilibrium models, Common Agricultural Policy, Agricultural and Food Policy, Research Methods/ Statistical Methods,

A heterogeneous-agent model with district-level constraints: an application to livestock development in Gansu, China

This paper develops a heterogeneous-agent model to assess the impacts of removing lucerne growing subsidies, increasing livestock numbers and including district-level equilibrium conditions on optimal farm plans in the Qingyang district of Gansu Province, China. The model is a five-year dynamic linear program that solves across 96 farm households whilst incorporating district-level constraints. The approach used allows us to observe seasonal variations in incomes, infer the distribution of a policy shock among households and highlight trade patterns at the district level. The results suggest that without lucerne growing subsidies the total area of lucerne grown by all modelled households falls by 18%. Increasing livestock numbers by 25% reduces net household incomes by 17% as changes to labour allocations reduce off-farm employment opportunities. When external trade in forages is included in the model, total livestock numbers held by all 96 households rise from 502 to 838, this highlights the benefits of integrated feed markets. Shadow prices for crop production rise when livestock numbers increase, implying that benefits exist to improving crop yields.Heterogeneous-agent model, district-level constraints, livestock, China., Farm Management,

Environmental Auditing in Management Systems and Public Policy

New international standards for environmental auditing are now being actively promoted by public authorities and adopted by private firms. One important feature of these standards is their emphasis on managerial systems and incentives that support a wiser use of environmental resources. This paper studies such a system, in which incentive compensation may be based in part on the results of an environmental audit. It is found that optimal wages after an environmental audit is performed should have a greater range than wages paid when no audit has occured. It is also shown that the decision to conduct an environmental audit and the size of the expected wage in this case depend crucially on whether the agent's prudence (or precautionary motives) dominates or not his aversion to risk. It is finally found that the insertion of environmental audits within current management systems would certainly induce a manager to care more about the environment; moreover, although this may come at the expense of less concern for other activities, we find plausible circumstances in which properly designed environmental audits overcome such a tradeoff and increase the manager's attention to both environmental and traditional tasks. The public policy maker's role and interest in promoting environmental auditing standards is also discussed briefly. De nouvelles normes pour les audits environnementaux sont actuellement en train d'être élaborées et implantées par les gouvernements et les entreprises. Ces normes mettent principalement l'accent sur les systèmes de gestion et les incitations qui encouragent un meilleur usage des ressources environnementales. Cet article étudie un tel système, où la rémunération pourrait dépendre en partie des conclusions d'un audit environnemental. On trouve que le salaire versé après la tenue d'un audit devrait varier davantage que celui versé lorsqu'il n'y a pas eu d'audit. On montre aussi que la décision d'effectuer un audit environnemental et le niveau du salaire espéré dans ce cas dépendent essentiellement de la relation entre la prudence (ou la précaution) et l'aversion pour le risque du manager. On montre finalement que l'insertion d'audits environnementaux au sein des systèmes managériaux usuels poussera certainement un manager à se préoccuper davantage de l'environnement,0501s la redistribution de l'effort de ce dernier pourrait bien ne pas survenir au détriment de ses activités principales au sein de l'entreprise. On discute enfin brièvement du rôle et de l'intérêt du décideur public dans l'élaboration et la promotion de nouvelles normes pour les audits.Multi Task Principal Agent Analysis, Environmental Auditing, Risk Aversion, Prudence, Analyse principal-agent multi-tâches, Audits environnementaux, Aversion pour le risque, Prudence

Structural, efficiency and income effects of direct payments: an analysis of different payment schemes for the German region 'Hohenlohe'

The objective of this paper is to work out some fundamental dynamic effects on agricultural structure, farm incomes, and efficiency that result from decoupled income payments, the transfer of payments together with a progressive payment cut. To do so, we apply the agent-based model AgriPoliS (Agri-cultural Policy Simulator). AgriPoliS is a normative spatial and dynamic model of regional agricul-tural structures that takes account of actions and interactions between a large number of individually acting farms. The model is calibrated to the region 'Hohenlohe' in Baden-Württemberg which is char-acterised by intensive livestock farming on the plains and extensive cattle and dairy farming in more remote valleys. The policy simulations show that impacts on structural change, competitiveness, and income distribution vary greatly depending on how the policy scheme is implemented. If direct pay-ments are completely decoupled from land use (no obligation to farm land) this has significant and lasting effects on the competitiveness of agriculture, structural change, farmers’ incomes and land-use.agricultural policy analysis, agent-based models, decoupling

On the optimal design of income support and agri-environmental regulation

In this paper, we develop a model of regulation for a set of heterogenous farmers whose production yields to environmental externalities. The goal of the regulator is first to offer some income support depending on collective preferences towards income redistribution and second to internalize externalities. The optimal policy is constrained by the information available. We first consider the second best where the regulator is able to observe all individuals decisions in terms of inputs and individual profit, but not the individual farming labor supply. We characterized the generalized transfer in function of the desire to redistribute and the underlying characteristics of the production process. In a second step, we assume that the regulator has only information on aggregate consumption of inputs and hence can only tax/subsidy linearly inputs and output. However, because the accounting profit remains observable, a non linear transfer of profit is still part of the optimal policy. In the last part of the paper, we endogenize the market price of land and examine how the optimal policy should be modified.asymmetric information, agricultural policy, agri-environmental policy, income support, Agricultural and Food Policy, Environmental Economics and Policy, Q18, Q12, Q58,

Econometric application of linear programming: a model of Russian large-scale farm (the case of the Moscow Region)

Linear programming model and general reciprocity theorem in mathematical programming are used to ap-proach utility functions of six large-scale Russian (the Moscow Region) case farms representing different production patterns. Technological coefficients of linear programmes are defined by means of linear regression. The data over 311 farms operating in the Moscow Region in 1999 are used. The utility functions include depreciation, wages and social costs. These attributes are about as desirable for the farms as profit. Milk production is associated with hidden utility amounting to a quarter of total utility. Vegetables market imperfections result from high price elasticity with respect to supply (–0.46). The scarcity of operating capital severely hampers agricultural production.linear programming, general reciprocity theorem, Leontieff technologies, farm behaviour, Russian agriculture, case farm, utility function, operating capital.