Hybrid Econometric Model Measuring Economic Impacts

Sanjeev Naguleswaran and John Colombo May 2016

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Applica)onofDataScience

Majorareasoffocusfortheanalysisare:

•  Economicdevelopmentandassociatedbenefits

•  Investmentpriori=sa=on(orjus=fica=on)

•  Businessengagement

•  Tourism

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Measuring Economic Benefits

1.  The Hybrid Econometric Model:

•  Overview of Matlab based modelling approach

•  The benefits of the Matlab approach

•  The development of interface and outputs

•  The reusability of the modelling approach – Matlab Compiler

2.  A demonstration of the interactive economic modelling outputs

using TIBCO Spotfire

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UseCase–MeasuringBenefit

2.Defineimpact/benefit

indicators

3.Undertakeeconomicmodelling

1.Establish,hostandmaintainananaly)csplaHorm(onlineenvironment)

Economicindicators:-  E.g.GDP-  E.g.Job

forecasts

Economic

Environmental

Socio-economic

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OverviewofRequirements

1.Definetheexpenditure

scope

2.Gatherhistoric

economicdata

3.Understandtheeconomicsignificanceofinvestment

areas

4.Combineexpendituredatawithinvestmentsignificancefactors

5.Visualisetheoutputswithdynamicinvestment

levers

Blendingmul)pledatasetstogether

Gatheringthebuildingblocksforamodelthatispragma)c,innova)ve,and

customised.

Analysingthedatainaninnova)veway

Usingsophis)catedalgorithmsto‘learn’whichinvestmentcategorieshave

contributedthemosttotheeconomyover)me

Visualisingthedatainacontemporarymanner

Presenta)onofoutputsinamodern

way,replacingsta)creports

6.Publishtheoutputs

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The‘NormalEconomy’-whatwouldhappenanyway

Definetrend:Basedoneconomicindicatorsinthefollowingareas:•  Investment•  Consump=on•  InterestRates•  Wages•  Produc=vity

Matlabforunderstandingthe

currenteconomyToolsouttheboxfor)meseriesanalysisandtrendforecas)ng•  DSGEModel–Econometrictoolbox•  DSGEModel–Opensource/Public•  VARmodel–FileExchange•  CodeupmodelyourselfusingMatlab

func=ons

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Conceptual model •  Provides the ability to to quantify economic benefit of an investment

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Using Data Science for Prediction

Define categories: Based on expenditures to key ABS economic categories •  Government and Private

Consumption •  Industry sector financial figures •  Transport/Tourism Expenditures

Matlab for Machine Learning Tools out the Statistical and Machine Learning Toolbox for Analysis •  Classification Learner for easy picking

of ideal classification tool •  Regression based ensemble of trees •  Determine significance of predictors/

features

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Determining Significance of Predictors/Features

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Interface to Interactive Tools

Output: Is based on outputting well formatted data tables •  Category vs. percentage •  GDP Results •  Jobs Results

Matlab for interfacing Standard Matlab functionality •  Output csv files •  Output tables •  Connect directly to Tibco Spotfire

through Statistics Services •  We used Matlab Compiler to provide a

stand alone executable to interface with Strategenics’ Spotfire platform

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TIBCO Spotfire Interface and outputs

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Hybrid Econometric Model

We will now provide a demonstration of the interactive model

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Hybrid Econometric Model

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Hybrid Econometric Model

Whentheinvestment‘levers’aremoved,alloca=onsofplannedinvestmentaredynamically

changed,impac=ngtheoutputs

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Hybrid Econometric Model

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Hybrid Econometric Model

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ThePlaHorm–EachStageofInvestment

1.Establish,hostandmaintainananaly)csplaHorm(onlineenvironment)

Economicindicators

Environmentalindicators

Socialindicators

Economicmodelling/forecas)ng

Datacollec)on/visualisa)on

Datacollec)on/visualisa)on

Pre-investment Duringinvestment Postinvestment

Ongoingdatacollec)onandanalysis

Ongoingdatacollec)onandanalysis

Ongoingdatacollec)onandanalysis

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Thankyou!JohnColomboPrac=ceLead–DataScience&Analy=csStrategenicsPhone:0423452584john.colombo@strategenics.com.au

SanjeevNaguleswaranPrincipalConsultantStrategenics

Contactus1300436427(GENICS)www.strategenics.com.auTwieer:@strategenics