From: Simon Kelly and Richard Percival, 2009; IMA Conference Paper

The Australian Population and Policy Simulation Model (APPSIM) simulates all of the major events that happen to Australians during their lifetime, on the basis of the probability of such events happening to real people in Australia. The simulated events include death, overseas migration, marriage, divorce, childbirth, ageing, education, labour force participation, retirement, etc. Through these events, people earn income, receive social security, pay taxes and accumulate assets.

To calculate the probability of an event occurring, the simulation uses transition probabilities (calculated from equations or tables), based on the person’s characteristics, history and the simulated time. As the simulation clock steps through time, the chance of a person transitioning from one state to another is considered (for example changing from the state of “employed full-time” to the state of “unemployed”). In the case of a transition between labour force states, the circumstances that influence a transition are the person’s age and sex; their labour force status in the previous two years; their education qualifications; whether they are married; the age of the youngest child in the family; whether they are old enough to access their retirement savings; whether they are eligible for a government age pension; and their health at that time.

The APPSIM model is written in C#, with the simulation reading in the starting population from a Microsoft Access® database and a series of Microsoft Excel® spreadsheets that contain the parameters (that can be readily changed by users) and benchmarking data.