4 BUILDING A MODEL TO ANALYSE FEEDBACK DYNAMICS
4.1 QUALITY THINKING FIRST
The secret to building useful models, ones that can be developed into valuable aids which inform highly effective decisions, is to spend quality time thinking about the attendant problem before actually starting to build a quantitative model of it. This first stage of investigation is enabled by systems thinking and qualitative system dynamics.
4.1.1 Example Problem—Population Dynamics Of Charmville
Let us consider the dynamics of the population, either producing growth or decline, of a mythical town named Charmville. Like any other town, in Charmville people are born, they live and die. People also migrate to and from Charmville. This migration might be influenced by economic factors such as cost of living and employment opportunities, both in Charmville and the adjacent large city of Metropolis. The influence of economic factors and employment opportunities will not be considered in this particular model. Such factors may be included in subsequent models based on the one built here.
To prepare for detailed analysis of our population dynamics problem, we would have already conducted qualitative system dynamics modelling and gathered both historical and current information about the following, for example:
- current size of Charmville’s population;
- fraction of the population who are female of child-bearing age, and how this is expected to vary during the period of interest;
- fraction of the population who die each year;
- rate of inwards migration; and
- rate of outwards migration.
In the first instance, the model will be used to investigate the possible effects of a policy through which local government authorities propose to manage the availability of housing or, less directly, the availability of land which might be developed for housing purposes. In the longer term, such a policy might serve to either encourage or deter migration, depending on trends observed in Charmville’s population. Note that, like the consideration of factors in what we might denote as the economic sector, the version of the model being developed here does not contain a housing sector. These and other sectors may be added as the model is developed further.
In a top-down approach, we enable the formulation of an architecture which will accommodate, for example, a range of sectors. These sectors might include population (the one we build here), a business or economic sector, and a building and construction sector. Limiting the scope of the initial model does not necessarily invalidate the addition of specific sectors. Indeed, because the model will be simple initially, the approach should provide confidence that it actually works as intended. Building sophistication and adding other sectors can come later. This is a fundamental strategy for building system dynamics models. However, our top-down approach must allow for these to be added and the model structured to accommodate that.
A policy which limits migrating-in is thought to be necessary because of the increasing numbers of people from the adjacent large city of Metropolis choosing to live in Charmville. Each day these people travel to Metropolis to work.
The goal for the local government authorities, who want to maintain the highly desirable lifestyle enjoyed by inhabitants of Charmville, is to stabilize the growth of the population to just 2% per annum over the next 10 years.
Local government authorities propose to manage population growth through a number of initiatives. The main one is to impose controls on the number of building permits issued. This will limit the number of new dwellings built. Building permits are valid for one year. In effect this means that, given the time taken to construct a new dwelling, granting a permit for construction will result in that new dwelling becoming available to be occupied just within one year.
Recent experience has been that all available dwellings are occupied. Across Charmville, the average occupancy rate is 2.1 persons per dwelling. New dwellings are sold and occupied almost immediately.
A temporary freeze has been placed on the issuing of building permits. The local government authorities seek to determine the year-by-year quotas for issuing building permits between now (1 July 2005) and the end of the period under consideration (1 July 2015).
In the steps demonstrated in this chapter, a preliminary computational model is built. This builds on Chapter 3 to demonstrate a methodology applicable to the building of all system dynamics models.