search

KarlNaumann / Mark0

Python interface for the Mark-0 Agent-based Model
MIT License
4 stars 0 forks source link

Consumption is computed using wrong wages #1

Closed jose-moran closed 1 year ago

jose-moran commented 1 year ago

It seems to me you are computing Wtot using

https://github.com/KarlNaumann/Mark0/blob/2d8431248f02cc2a6cf68e30028ad8ad55b8d8f3/mark0_covid/mark0_covid.cpp#L390C21-L390C39

and then setting the budget as

https://github.com/KarlNaumann/Mark0/blob/2d8431248f02cc2a6cf68e30028ad8ad55b8d8f3/mark0_covid/mark0_covid.cpp#L505

But presumably you want Wtot to be the sum of wages, not of wages times production.

KarlNaumann commented 1 year ago

No, this is correct: the household's income is wages production (see e.g. profit of firms, they pay out W_iY_i).

Note that wages need to be adjusted for the amount worked (i.e. labor hours * hourly rate), which in Mark-0 is given by Y_i since we have unit labor productivity (one should probably divide by zeta to make sure, but it is generally set to 1.0 anyway). If this weren't the case - total wages paid would be insensitive to the state of unemployment, which is unintended.

jose-moran commented 1 year ago

Indeed, I was a bit confused by the variable name. Thanks!