Modelling Housing using spatial microsimulation

Presenter: Robert TantonPosition: Research Director, Social Inclusion and Small Area Modelling team

Date: 31 July 2009

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Format

● Introduction to the Social Inclusion and Small Area Modelling (SISAM) team at NATSEM

● Evidence based policy

● Modelling Housing policy

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Introduction to SISAM

● New team formed this year

● Concentrate on social inclusion and small area modelling (spatial microsimulation)● Robert Tanton – Research Director

● Justine McNamara –Children and Families team

● Research on housing, housing stress and homelessness under social inclusion

● WWW.NATSEM.CANBERRA.EDU.AU/SISAM● Links to all papers, online maps, etc

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What does SISAM do?

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Evidence based policy

● The Government’s agenda for the APS● “Today I want to discuss seven elements of the Government’s

vision for the future Australian public service:

– 3) Developing evidence-based policy making processes as part of a robust culture of policy contestability”

(Kevin Rudd, Address to Heads of Agencies and Members of Senior Executive Service,30 April 2008)

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Limits to evidence based policy

● Part of a complex process● Also consider politics, public mood and opinions

● … but policy modelling will give some idea as to cost of policies, who benefits, and can affect public mood and opinion

● Evidence based policy? Or evidence informing policy?● Is policy based purely on evidence? Or should evidence inform

policy?

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Research informing policy

● Sandra Nutley (Professor of Public Management, University of St Andrews):● “if research is used to inform policy, what works best is

interactive and ongoing processes and relationships between policymakers and researchers”

● At a practical level, round-tables or workshops are seen as a cost effective, safe haven way of sharing ideas, analyses or perspectives.● Meredith Edwards, “Research shouldn’t stop at a report”, The

Public Sector Informant, p. 28

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Models NATSEM has to study housing and the effects of policy change

● HOUSEMOD● Developed with AHURI

● Used for a number of analysis and policy modelling

– Before and after housing poverty

– Small area housing stress

– Housing affordability and Commonwealth Rent Assistance

– Small area projections of the demand for housing assistance

● Developed further with ACT Land Development Agency

● Projections module added – to 2020

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What can HOUSEMOD do?

● Small area:● Change in housing markets, eg, effect of changes in interest

rates

● Estimates of housing stress before and after policy change

● Can model complex policies● Example: Trying to get people onto CRA rather than public

housing

– Increase amount received through CRA to encourage people to use CRA

– increase public housing rent to encourage people off public housing

– impact of policy change on other Centrelink benefits can be included

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What can HOUSEMOD do?

● Projections based on current policies or new policies● Annual out to 2017

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Small area housing stress

● Online maps – Housing Stress using the 30/40 rule● http://web.natsem.canberra.edu.au/maps/AUST_SMSM08/atlas

.html

● Analysis of a number of different measures of housing stress● 30 rule

● 30/40 rule

● 30/10-40 rule

– Measuring housing stress at small area levels: How much do definitions matter?, Binod Nepal, Robert Tanton, Ann Harding and Justine McNamara

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Small area housing stress – Online maps

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Examples of work done using HOUSEMOD

● FAHCSIA – Estimates of housing stress

● HIA – Effect on housing stress of interest rate increases

● AHURI – Before and after housing poverty, Intergenerational sustainability of housing

● St Vincent De Paul - How much would be required to put all low income renters out of housing stress?● $74 per household per week on average to put everyone out of

housing stress

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What can’t HOUSEMOD do?

● Morning after effects only● Static microsimulation model – no behavioural impact

– Eg, can look at effect on housing stress after interest rates increase, but cannot incorporate change in demand for housing because prices higher

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What sort of policy options could be modelled?

● Change in CRA (see above example)

● Effect of interest rate changes on housing stress

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What could be done

● Introducing some behavioural model● Tenure choice

● Improving projections module● Using method developed from other grants

● Introducing Supply/Demand analysis● Link to macro model

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Funding

● Consultancies (see above – HIA, St Vincent De Paul, FAHCSIA, AHURI)● Short term use of the model – don’t provide funding for

methodological developments unless required for consultancy

● Linkage grants● Provide long term funding for methodological advances

● Provide linkage partners with analysis using new methodological advances

● Provide us with experts in each State to help develop and validate model and provide comments - collaboration

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Future

● Collaborations with States● Work with States to model different housing scenarios

● Provide results in focus groups to talk through results

● Linkage Grant● To introduce behavioural elements and conduct some policy

analysis

● Approx $30,000 per year commitment over 5 years

● Funding matched by Commonwealth

● Policy analysis agreed on by partners

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Cost/Benefit analysis

● How much does a policy with unintended consequences cost?● Making things much worse for low income families compared to

high income families – was this intended?

● Making thing worse for different areas – will rural areas be affected worse? Or inner city? Was this intended?

www.natsem.canberra.edu.au

Questions/Comments/Discussion