2nd Topic

Calibration of Microsimulation

Introduction:
Microsimulation calibration is the process of adjusting the parameters
and inputs of a microsimulation model to ensure that its outputs align
with observed data or desired outcomes. Microsimulation models are
computer-based tools used to simulate the behavior and interactions of
individual agents within a larger system.

Scope of the calibration problem

The scope of the calibration problem in microsimulation can vary
depending on the complexity of the model and the specific objectives
of the study. The calibration problem encompasses several aspects,
including:
Ø Parameter Estimation
Ø Input Data Calibration
Ø Model Validation

Some common types of calibration methods employed in

microsimulation:
Direct Calibration:
Direct calibration involves directly adjusting the model's parameters to
match specific targets or reference data. This approach requires a clear
understanding of the relationship between the model parameters and
the desired outputs. It often involves using optimization algorithms to
minimize the difference between the simulated outputs and the
observed data. Direct calibration is useful when there is a
straightforward relationship between parameters and outputs.
2. Indirect Calibration:
Indirect calibration focuses on calibrating the model by adjusting inputs
or intermediate variables rather than directly modifying the parameters.
This approach aims to improve the alignment between the simulated
model outputs and observed data by adjusting the exogenous factors or
underlying assumptions of the model. Indirect calibration is

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particularly useful when it is challenging to directly control or measure
certain model parameters.
3. Multi-Objective Calibration:
Multi-objective calibration involves optimizing the model's parameters
to simultaneously satisfy multiple criteria or objectives. In
microsimulation, there are often multiple aspects or variables of
interest that need to be calibrated. This approach allows for the
consideration of trade-offs and conflicting objectives in the calibration
process. Multi-objective calibration helps find a set of parameter values
that provide a good balance across various criteria.

4. Sequential Calibration:
Sequential calibration involves an iterative process where the model is
calibrated in multiple stages or steps. Each stage focuses on specific
subsets of parameters or aspects of the model. This approach allows for
a more systematic and manageable calibration process, especially in
complex models with numerous parameters. Sequential calibration can
involve starting with rough estimates and progressively refining the
model's parameters through multiple iterations.
5. Bayesian Calibration:
Bayesian calibration uses Bayesian inference techniques to estimate the
probability distributions of model parameters based on observed data.
It combines prior knowledge or beliefs about the parameters with the
likelihood of the observed data to update the parameter estimates.
Bayesian calibration provides a probabilistic framework for parameter
estimation, allowing for uncertainty quantification and incorporating
prior knowledge into the calibration process.
6. Sensitivity Analysis-guided Calibration:
Sensitivity analysis is often conducted alongside calibration to
understand the influence of different model parameters on the outputs.
Sensitivity analysis-guided calibration involves identifying the most
influential parameters through sensitivity analysis and focusing the
calibration effort on those parameters. By prioritizing the most
influential factors, this approach streamlines the calibration process and
ensures that the most critical aspects of the model are accurately
represented.

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General steps involved in calibrating a microsimulation model:

Define the objectives:

Determine the specific goals and outcomes you want to achieve with
the microsimulation model. This could include matching observed
data, replicating historical trends, or projecting future scenarios.

Gather data:
Collect relevant data on the variables and parameters that influence the
behavior of the agents in the microsimulation model. This may involve
data on demographics, economic factors, policy variables, or other
relevant indicators.

Develop the model:

Construct the microsimulation model using appropriate software or
programming languages. Specify the rules, assumptions, and
relationships that govern the behavior of the agents in the system.

Parameter estimation:
Estimate the values of the model's parameters based on the available
data. This may involve statistical techniques such as regression
analysis, optimization algorithms, or expert judgment.

Model validation:
Assess the performance of the microsimulation model by comparing its
outputs to real-world data or established benchmarks. Identify any
discrepancies or areas where the model's behavior deviates from the
observed reality.

Sensitivity analysis:
Conduct sensitivity analyses to understand how changes in the model's
parameters affect its outputs. This helps identify which parameters
have the most significant impact on the results and can guide the
calibration process.

Calibration adjustments:

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Adjust the model's parameters or inputs iteratively to improve its
performance. This may involve refining the parameter estimates,
modifying the model's rules, or incorporating additional data sources.

Iterative refinement:
Repeat steps 4 to 7 until the model produces outputs that closely align
with the desired outcomes or observed data. This iterative process may
involve fine-tuning the model, testing different scenarios, and
comparing the results to real-world observations.

Documentation:
Document the calibration process, including the choices made, data
used, and the final parameter values. This documentation ensures
transparency and reproducibility of the calibration process.

Sensitivity analysis and validation:

Perform additional sensitivity analyses and validation tests on the
calibrated model to ensure its robustness and reliability. Assess the
model's performance under different scenarios and stress tests.

Flowchart based on Calibration of Micro Simulation:

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Conclusion:
Calibration is a critical step in the development and application of
microsimulation models. It ensures that these models accurately
represent real-world systems, validate underlying assumptions, support
policy design and evaluation, enable sensitivity analysis, and enhance
transparency and reproducibility. By investing time and effort into
calibration, researchers and analysts can increase the reliability,
accuracy, and utility of microsimulation models, ultimately improving
their ability to inform decision-making and address complex societal
challenges.

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Park, B., Qi, H.: Development and evaluation of simulation model

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