Sensitivity Analysis in Economic Simulations: A Systematic Approach

Sensitivity analysis studies how the variation in the numerical output of a model can be quantitatively apportioned to different sources of variation in basic input parameters. Thus, it serves to examine the robustness of numerical results with respect to input parameters, which is a prerequisite for deriving economic conclusions from them. In practice, modellers apply different methods, often chosen ad hoc, to do sensitivity analysis. This paper pursues a systematic approach. It formalizes deterministic and stochastic methods used for sensitivity analysis. Moreover, it presents the numerical algorithms to apply the methods, in particular, an improved version of a Gauss-Quadrature algorithm, applicable to one as well as multidimensional sensitivity analysis. The advantages and disadvantages of different methods and algorithms are discussed as well as their applicability. --Sensitivity Analysis,Computational Methods

Optimal Taxation in a Simple Model of Human Capital Accumulation

This paper studies optimal taxation in dynamic economies with a simple form of human capital accumulation as considered in Bull (1993). We show that in a Ramsey equilibrium along any balanced growth path, the taxes on wage income and (physical) capital income must be zero. Under the assumption on preferences of Bull (1993), we extend his result by showing that along a balanced growth all optimal taxes are necessarily zero.

Sensitivity analysis in economic simulations : a systematic approach

Sensitivity analysis studies how the variation in the numerical output of a model can be quantitatively apportioned to different sources of variation in basic input parameters. Thus, it serves to examine the robustness of numerical results with respect to input parameters, which is a prerequisite for deriving economic conclusions from them. In practice, modellers apply different methods, often chosen ad hoc, to do sensitivity analysis. This paper pursues a systematic approach. It formalizes deterministic and stochastic methods used for sensitivity analysis. Moreover, it presents the numerical algorithms to apply the methods, in particular, an improved version of a Gauss-Quadrature algorithm, applicable to one as well as multidimensional sensitivity analysis. The advantages and disadvantages of different methods and algorithms are discussed as well as their applicability

Impact of Service Station Networks on Purchase Decisions of Alternative-fuel Vehicles

In this paper we analyze the impact of service station availability on the demand for alternative-fuel vehicles and the consumers' willingness to pay for an enlarged fueling infrastructure. We examine a stated preferences choice experiment conducted as a CAPI survey with about 600 interviews of potential car buyers in Germany and estimate the coefficients of a discrete choice model. We simulate different scenarios and analyze how individual choice probabilities for alternative fuel-types are changing with a modified fueling infrastructure. In our scenarios hybrids, LPG/CNG and hydrogen will be real alternatives to the existing conventional technologies. However, biofuels and electric power trains are well behind even in a situation where their infrastructure is equally developed. Moreover, on the basis of our model we compute what increases in fixed or variable costs consumers of different income groups are willing to accept for an increasing station density. --Fueling Infrastructure,Alternative Fuels,Automobile Market,Stated Preferences,Discrete Choice,Network Effects

Impact of service station networks on purchase decisions of alternative-fuel vehicles

In this paper we analyze the impact of service station availability on the demand for alternative-fuel vehicles and the consumers’ willingness to pay for an enlarged fueling infrastructure. We examine a stated preferences choice experiment conducted as a CAPI survey with about 600 interviews of potential car buyers in Germany and estimate the coefficients of a discrete choice model. We simulate different scenarios and analyze how individual choice probabilities for alternative fuel-types are changing with a modified fueling infrastructure. In our scenarios hybrids, LPG/CNG and hydrogen will be real alternatives to the existing conventional technologies. However, biofuels and electric power trains are well behind even in a situation where their infrastructure is equally developed. Moreover, on the basis of our model we compute what increases in fixed or variable costs consumers of different income groups are willing to accept for an increasing station density

Impact of service station networks on purchase decisions of alternative-fuel vehicles

In this paper we analyze the impact of service station availability on the demand for alternative-fuel vehicles and the consumers’ willingness to pay for an enlarged fueling infrastructure. We examine a stated preferences choice experiment conducted as a CAPI survey with about 600 interviews of potential car buyers in Germany and estimate the coefficients of a discrete choice model. We simulate different scenarios and analyze how individual choice probabilities for alternative fuel-types are changing with a modified fueling infrastructure. In our scenarios hybrids, LPG/CNG and hydrogen will be real alternatives to the existing conventional technologies. However, biofuels and electric power trains are well behind even in a situation where their infrastructure is equally developed. Moreover, on the basis of our model we compute what increases in fixed or variable costs consumers of different income groups are willing to accept for an increasing station density

Deciphering the redox signalling pathway in long-lived mitochondrial mutant

Most manipulations that extend lifespan also increase cytoprotective mechanisms to various stress in a range of animals from yeast to mammals. However, the underlying signalling cascades regulating stress resistance and longevity are still largely unknown. Here, we identified a mitochondrial ROS (mtROS) pulse during L4 as novel activator of transcriptional factor Krüppel-like factor-1 in isp-1(150);ctb-1(189) mitomutant. For this purpose, we created a de novo outer mitochondrial membrane (OMM) H2O2 sensor by adding a TOMM20 targeting sequence to the roGFP2-Orp1 probe. We further show that H2O2 signalling is dependent on superoxide dismutase-1 (SOD-1), peroxiredoxin-3 (PRDX-3) and voltage-dependent anion channel-1 (VDAC- 1). Upon the ROS signal, KLF-1 is activated by the p38 MAPK signalling cascade and translocates to the nucleus where it activates genes involved in phase I of xenobiotic detoxification programme, the cytochrome P450 oxidases (CYPs). Collectively, these findings underline the importance of ROS, especially H2O2, as signalling molecule and identify the p38 MAPK signalling cascade as a key regulator of mitomutant lifespan

Making a Home in the Old Eighth Ward - With Biography of Hannah Braxton Jones

According to the 1900 census, just over 50,000 people called Harrisburg their home. Of these 50,000 people, 4,435 lived in the Old Eighth Ward. The eighth ward was disproportionately occupied by African-American residents. A total of 1,507 African Americans lived in the Old Eighth Ward, which comprised about 34% of the population of this ward. This percentage is quite large in comparison to other wards in the city. Second to the eighth ward, the ward with the largest African American population was the second ward; African Americans comprising about 11% of the population. In contrast, the tenth ward was the least diverse, with African Americans comprising only .5% of the total population. The average population percentage of African Americans in all the wards of the city except the Eighth Ward was only about 6%, which is a startling contrast to the 34% of African American residents in the Eighth Ward. The Old Eighth Ward was also home to many immigrants. 359 people, or about 8% of citizens of the Old Eighth Ward were born outside of this county. Also, an additional 359 citizens or 8% had both parents who were born outside of this country, but they themselves were born in the US, mostly in Pennsylvania, Maryland, and Virginia. 859 people had just one parent born outside of this country. Many people of the Old Eighth Ward had strong a strong cultural heritage to another geographic location, which created a uniquely diverse community in the heart of the capital city. Statistically, the Old Eighth Ward was the most diverse neighborhood in the city of Harrisburg, with a high percentage of African American residents and many first or second generation immigrants from all over the world who made their home in the Old Eighth Ward of Harrisburg. However, this diverse community was greatly affected by the Capitol Park extension. Many people were displaced and forced to relocate to another part of the city, as homes and businesses were torn down to make room for this expanded capitol. About twenty-nine acres, from North Street to Walnut Street were within the land that was taken to extend the capitol complex. Within these twenty nine acres were many homes filled with stories and fond memories of childhood. One story that Wert captures in his article “The Passing of the Old Eighth,” details an encounter between the current and former owner on a house on State Street that was to be demolished. A woman appeared at the door of her former home, and the current owner graciously allowed this woman to tearfully relive her childhood memories in a house that was a home to her years prior. Another story that Wert tells is of a rich man, who earned a lot of money through silver mines, who built his mother a mansion which would have been worth about $10,00 dollars at the time. Wert sought to perpetuate this story of a son’s kindness to his mother by making sure this story was told. Boarding Houses were also an important lodging in the Old Eighth Ward. However, most boarding houses were seen as a place of vice where alcohol was prominent. Prior to the Capitol Park Extension, Theodore Frye, an African American man, owned a hotel on State Street in the Eighth Ward. In 1913, there were accusations of underage drinking at Frye’s hotel, and by 1917, Frye’s liquor license was rejected, and this was the only liquor license of a person of color in the Old Eighth Ward. Before this in 1916, Frye attempted to move his property in order to protect it from the Capitol Park Extension, but the reputation of “vice” at his boarding house, which was partially influenced by his race, caused opposition to arise from the Pennsylvania Railroad Company. Boarding houses were not only a place with a reputation of vice and liquor. Temperance hotels were founded throughout the Eighth Ward, which were alcohol-free hotels which were intended to be safer for women and children to stay at during their travels. The Women’s Christian Organization was responsible for founding some of these “temperance hotels.” Boarding houses and temperance hotels were an important part of the Old Eighth Ward, and the reputation of boarding houses Hannah Braxton Jones was born to Joseph and Maria Braxton in Virginia around 1855. When Hannah was about eleven years old, she moved to the Old Eighth Ward of Harrisburg with her family in 1866. After moving to Harrisburg, much of Hannah’s early life revolved around her father’s church, Second Baptist Church, which was founded by Joseph Braxton upon his arrival to Harrisburg. At the time of her father’s death, Second Baptist Church had grown from about six members at its founding to nearly one hundred and seventy five members. In her early twenties, prior to 1880, Hannah married George Jones, and the two remained in Harrisburg and had two children, James and Mary Jones in 1875 and 1878. During this time, Hannah’s husband, George, was a reverend at Second Baptist Church, and Hannah herself was heavily involved in the church through leading women’s Bible studies, performing readings during the service, and contributing to the music. In 1881, George Jones had stepped down as head pastor of Second Baptist Church, but throughout the next ten years, he spoke frequently as a guest speaker. However, by 1900, George Jones had died, leaving Hannah Braxton a widower. Also, during this time Hannah Braxton Jones became one of the few women of color in the city at this time to purchase a house with only her name on the deed. Until her death in 1928, Hanah Jones remained active in her church and in her community, and she taught music in Harrisburg. According to her obituary, Hannah was survived by her two children, six grandchildren, and even two great-grandchildren.https://mosaic.messiah.edu/look/1011/thumbnail.jp

Business and Social Life in the Old Eighth Ward - With biography of Colonel W. Strothers

Despite its reputation as a lower-income and vice-ridden region, the Old Eighth Ward was a thriving place for businesses, both large and small. In fact, much of the neighborhood’s reputation for unhealthiness was a result of the prominent industries that called the ward home. One such factory was W. O. Hickok Manufacturing Company, also referred to as the “Eagle Works,” the oldest and most prominent industrial plant in the Old Eighth Ward and one of the first manufacturing plants to use electricity for light and power. Additionally, Eagle Works’ founder, Orvil Hickok, served as a councilman for the borough of Harrisburg.Gordon Manufacturing Company, located at 424 and 426 State Street, was another hub of manufacturing within the Old Eighth Ward. After starting in the attic of a dwelling on South Fourteenth Street in 1898, it moved to a large brick building on Montgomery Street, and then to State Street due to the company’s continuing growth. “Among the local industries that distinguish Harrisburg as a manufacturing city is one that has carried its good name far and wide…. This industry has grown wonderfully during the past few years and on the factories known most widely throughout this and other countries is the Gordon Manufacturing Company.” Harrisburg Daily Independent, October 2, 1905 Right next door to the Gordon Manufacturing Company was the Paxton Flour and Feed Company, organized in 1872 by John Hoffer, Levi Brandt, and the James McCormick estate. The feed company was one of the leading grain shipping centers of Central Pennsylvania with multiple locations throughout Cumberland County.Kurtzenknabe Printing was owned and operated by the family notable musician, hymn-writer, and teacher, J. H. Kurtzenknabe. Kurtzenknabe used the print shop to publish a number of successful hymnals, many designed specifically for children.Not all business in the Old Eighth Ward was industrial. Printing offices, pool houses, drug stores, bakeries, confectioneries, restaurants, and laundry services also thrived. The ownership of these small businesses reflected the diversity of the Old Eighth Ward community. German bakers, for example, became prominent, serving the entire neighborhood. One such baker was Frederick Wagner, who emigrated from Prussia in 1855. He operated a bakery at the corner of State and Cowden Streets for forty-four years, employing a number of apprentices, thus growing the profession as he succeeded. Lewis Silbert, a member of the Jewish community operated a confectionery just down the street from Wagner as well as a cigar store. Besides his family, fourteen others lived and worked with him, which included four African-Americans who had emigrated from the South as well as four mixed-race individuals.Business and politicsoften mixed in the Old Eighth. In fact, one block of businesses became the heart of African-American Republican politics at the time. The corner of Short and South Streets came to be known as “Frisby Battis Corner.” Frisby C. Battis lived there and operated a saloon, a cigar store, and a pawn shop from the building. Next door he opened a pool room which became a headquarters for Republican politics in the Old Eighth Ward, especially as Battis sought to challenge the powerful Democratic Alderman Charles P. Walter. In fact, Battis once found himself in front of a judge as a result of this potent mixture of business and politics. Accused of selling liquor on a Sunday as well as operating a gambling house, the charges were contested with arguments that Battis was being persecuted for his political work by over-zealous Democrats. Although the judge threw out the case, Battis took this as a sign and relocated to Washington D.C. While Republican allies swore that Battis was being unfairly harassed, it is worth noting that despite his partisan allegiances, his place of business and home was used as a poling place for one precinct of the Old Eighth Ward, leading to many accusations of election interference. Regardless, up until the demolition of the Old Eighth Ward, “Frisby Battis Corner” was regularly listed in papers advertising polling places for residents of the ward. Many other businesses and social institutions called “Frisby Battis Corner” home. Colonel W. Strothers operated a pool hall which shared the property with the Brotherly Love Lodge, the Harrisburg headquarters for the oldest and most active African-American Fraternal organization of the time, the Grand United Order of Odd Fellows. Strothers was similarly involved in local politics and social welfare organizations. So too was William Parson’s, who owned a drug store across the street from Battis’s businesses. Colonel W. Strothers was a larger-than-life personality in the Old Eighth Ward. He owned a number of different business, including a pool hall, restaurant, cigar store, and barbershop, most of which were located next to his home in the Old Eighth Ward. Despite being over 300 pounds, he also earned a reputation for being an excellent dancer, even providing dance lessons throughout Harrisburg. However, he is perhaps best remembered as the manager of the Harrisburg Giants, which at the time played in the Eastern Colored League, earning a reputation for a high-powered offense. While the Harrisburg Giants’ success came after the demolition of the Old Eighth, Strothers’s ability to raise and run the team was deeply tied to his life there. Originally a police officer, he quickly transitioned to business and politics. Like many of the Old Eighth’s African-American leaders, he was prominent within fraternal organizations, active in the church community, and like his close colleague Frisby Battis, used his businesses to host and promote Republican politics in the ward.https://mosaic.messiah.edu/look/1005/thumbnail.jp