A Microsimulation Model to Identify the Effects of Regulatory and Concessional Pricing

This paper shows how a microsimulation model has been used in Australia to identify how different clients are affected by regulatory and/or concessional pricing. The regulatory and concessional pricing is in the areas of Electricity, Gas and Water utilities provision. The model is based on survey data from the client, and allows the client to model how changing regulatory and/or concessional pricing will affect different families (so a Winners and Losers analysis), how it will affect the revenue of the utilities companies, and how it will affect the Government’s expenditure (as they fund the concessions). The latest version of the Utility Concessions Model was created for the Australian state of New South Wales, and uses an Excel front end Interface with the model being written in SAS and run from Excel. This paper describes how this was done, and outlines the advantages of this approach when there are a number of parameters.