1 JD Hunt JE Abraham JAS Khan University of Calgary Workshop of the Land Use Transport (LUT) Modelling Group London, UK 2 July 2005 Calgary Testbed for Microsimulation of Business Establishments Part 1 Introduction and Synthetic Population Generation

2 Context Introduction Context PhD Research at University of Calgary student: JAS Khan supervisor: JD Hunt support: JE Abraham, as PDF ILUTE project funded by SSHRC: focus on behavioural mechanisms influencing travel more basic, less practical focus less concern about short-term practical relevance more concern about longer-term possibilities for practice less focus on calibration, more on behaviour and potentials

3 Terms Introduction Terms Business Establishment (BE) portion of a firm conducting activities at a single physical location Firmography: demography for BEs, covering: - births - deaths - locations/relocation/migration

4 BE Representation - Objects Approach BE Representation - Objects BE properties: consumption behavior (production function), what is used per unit of output: commodities – three transportable categories labour – a single category, produced by households floorspace – two types, commercial and residential production behavior – fixed number of units of output in one of three commodities age (number of years BE active) geographical location - cell where located

5 Testbed Application Hypothetical Case test geography 9x9=81 zones, each with 100 cells each cell 1 acre mix of sizes and types of establishments start with 1,400 BEs mix of initial floorspace types and quantities in each cell 3 floorspace types, range of allowable FARs static external economic conditions runs for 100 years

6 Simulation Methods Approach Simulation Methods Monte Carlo Technique: selecting changes in states from sampling distributions based on probabilistic choice models and observed distributions Each BE considered once per year Floorspace development changes considered once per year Prices updated each 6 months

7 Behavior Represented Approach Behavior Represented Includes behavior of and interactions among: BEs land development PECAS: builds on, and extends, what’s been shown to work in PECAS: Production, Exchange & Consumption Allocation System

8 JD Hunt JE Abraham JAS Khan University of Calgary Workshop of the Land Use Transport (LUT) Modelling Group London, UK 2 July 2005 Calgary Testbed for Microsimulation of Business Establishments Part 2 Firmography

9 BE Dynamic Behavior Approach BE Dynamic Behavior New set of BEs added each year in each zone randomly assigned attributes no contributions to input or output – a testrun of an ‘idea’ Each year BE makes decision to ‘stay’, in same floorspace area in same cell ‘relocate’ to some other floorspace area in another cell ‘leave’, the model area (emigrating or folding up) : Using a nested logit model at top level of PECAS hierarchy of models with composite utilities from PECAS hierarchy feeding up Prices change at each exchange zone every 6 months

10 JD Hunt JE Abraham JAS Khan University of Calgary Workshop of the Land Use Transport (LUT) Modelling Group London, UK 2 July 2005 Calgary Testbed for Microsimulation of Business Establishments Part 3 Location and Interaction Treatments

11 Reasons for using PECAS A model of the spatial economy, including labour, goods, services, floorspace and capital Establish locations of activities (population and employment) and spatial interactions Produce the “land use” inputs to transportation demand forecasting models for practical transportation planning Based on Input-Output theory, but integrated with discrete choice theory and disaggregated markets and including an explicit representation of transport costs Quasi-equilibrium (aka quasi-dynamic), with floorspace supply modelled dynamically, and equilibrium solutions influenced by past conditions to introduce lags Builds on theory and experience with MEPLAN and TRANUS planning models, but more behavioural and consistent with economic theory and discrete choice theory.

12 Production - Exchange - Consumption selling allocation process total consumption total production total production total production buying allocation process commodity flows exchange zone exchange zone exchange zone

13 PECAS Schematic Logit allocation of activity to zones Aggregation of commodity Zutilities, choice of production function Allocation to exchange zones based on price at exchange zones and transport disutility to/from exchange zones Microsimulate establishment behaviour at this level in this research In these two levels, replace equilibrium price representation with dynamic price update representation based on excess demand

14 Land development (LD) In practical work with PECAS, and in this research, a disaggregate microsimulation of Land Development (floorspace supply) is used: adjust the quantity of space over time in response to changes in price represents the behaviour of developers and landowners in land improvements decisions Land is represented here as small "grid cells" Grid cells representing age, density, development types, & types of development allowed

15 Floorspace changes each year LD Dynamic Behavior Approach LD Dynamic Behavior No Change Change options Add more of the same Redevelop as same Redevelop as different Developer choice

16 Testbed Application Initial Floorspace

17 Testbed ApplicationZoning

18 Calibration Testbed Application Calibration adjust parameters until: model stable results not unreasonable work iteratively, parameter by parameter note emphasis on understanding and testing rather than practical results

19 move or stay or leave’ dispersion parameter values. Unreasonable value (too-high) Testbed Application- Calibration move or stay or leave’ dispersion parameter values. Unreasonable value (too-high)

20 Testbed Application- Calibration

21 Calibration – Reasonable value Testbed Application Calibration – Reasonable value

22 Calibration – Reasonable value (Cont.) Testbed Application Calibration – Reasonable value (Cont.)

23 JD Hunt JE Abraham JAS Khan University of Calgary Workshop of the Land Use Transport (LUT) Modelling Group London, UK 2 July 2005 Calgary Testbed for Microsimulation of Business Establishments Part 4 Scenarios and Future Work

24 Alternative Policy Test 1 Testbed Application Alternative Policy Test 1 Reference Case 30% floorspace rent increase zones 202, 203, 204

25 Alternative Policy Test 2 Testbed Application Alternative Policy Test 2 Reference Case 30% floorspace rent subsidy zones 202, 203, 204

26 Alternative Policy Test 3 Testbed Application Alternative Policy Test 3 Reference Case 50% development cost subsidy zones 202, 203, 204

27 Alternative Policy Test 4 Testbed Application Alternative Policy Test 4 Reference Case 30% price increase various zones

28 Alternative Policy Test 5 Testbed Application Alternative Policy Test 5 Reference Case double travel costs everywhere

29 Alternative Policy Test 6 Testbed Application Alternative Policy Test 6 Reference Case new freeway; reduced travel times and costs

30 Alternative Policy Test 7 Testbed Application Alternative Policy Test 7 Reference Case increase allowable development all kinds zones 202, 203, 204

31 Alternative Policy Test 8 Testbed Application Alternative Policy Test 8 Reference Case changed allowable development for commercial, various zones more less

32 Conclusions Model and approach work: reasonable aggregate behavior from disaggregate treatment policy responses as expected Increased understanding of system: link from individual BEs to aggregate patterns new perceptions of Von Thunen Alonso Hotelling – Ice Cream Salesmen on a Beach Christaller Central Place Theory Seems to offer interesting potential way ahead in practical modelling, but...

33 Conclusions Run times an issue: 10 hours for 100 years of hypothetical scenario using 1GHz computer with 800 MB of RAM Range of BE sizes and types: no growing and declining, just appearing and ‘leaving’ range of technologies, but simplified Reality much more complex, with many more commodity types, interactions and markets Substantial data issues also side-stepped here Gap to full-blown practical application greater than with mirco-simulation of households a ways into future.... more questions arising