Chapter 1: Introduction

Microsimulation modelling is a simulation-based tool with a micro unit of analysis that can be used for ex-ante analysis. It is a micro-based methodology, utilising micro units of analysis such as individuals, households, firms and farms, using surveys or administrative datasets. It is a simulation-based methodology utilising computer programmes to simulate public policy, economic or social changes on the micro population of interest.

The methodology allows one to evaluate and improve the design of public policy on a computer before rolling out often costly programmes on the general population. To some extent the methodology can be regarded as a computer-based laboratory for running policy experiments. They can thus help to improve the effectiveness and efficiency of public programmes. The field spans users in government who use the method in the design and evaluation of public policy and as part of main stream academic researcher.