beyond pt 0 23/1

Appendix A
Study methodology, shocks and data
… to my mind, a model is
useless if it is just a black
box where nobody knows
what is in it except its
author. Full documentation
is an absolute necessity.
Hargraves, C., ‘A comparison of
the macroeconomic results of the
economy wide models of Australia
in response to a rise in labour
productivity, in EPAC’ (1994)
A.1 Study methodology
A common approach when looking at e-commerce has been to conduct a
survey of business leaders’ views. Drawing on practical experience in this
way can provide some useful data, and indeed, this study has used the
results of some surveys of this nature. Because of the lack of an
underpinning framework, however, a risk with the survey approach is
that it serves to reinforce the conventional wisdom rather than tease out
new insights.
Valuable additional insights can be found from the application of models
based on theoretical frameworks that have been proven to be useful when
looking at similar issues. The problem with this is that many of the
analytical techniques used by economists and public policy practitioners
(including statistical analysis tools and macro economic modelling) are
hamstrung by the absence of reliable data about the issue at hand.
As noted in Chapter 1, the study combined these two techniques—relying
on the Industry Reference Group (IRG) for expert opinion and to provide
a reality check on the study’s conclusions and using the MONASH model
for the rigorous economic framework.
The IRG’s role was to give the study strategic direction, to provide as
much information as possible about the nature of the impacts of
e-commerce and, as indicated above, to provide a reality check for the
inputs to the model and sectoral reports. The IRG provided strategic
input at the earliest stages of the project to help define the parameters to
be used in the MONASH Model and provided comments at a number of
progress meetings throughout the study process. This was important in
giving the model a more realistic perspective.
The IRG also completed an industry survey, to collect information
germane to both the modelling process and as a primary source of input
for the sectoral reports contained in Part 2.
Through a series of meetings and interviews, IRG members shared their
experience with the study team and assisted in ensuring that the direction
the study took reflected their views about the outlook. IRG members
were also involved in a survey used to assess the implications of
e-commerce for key industry sectors.
A detailed review of alternative economic evaluation techniques
conducted in an earlier scoping study identified that the MONASH model
was the best means of assessing the structural change from e-commerce.
This was because use of the model allowed for straightforward
incorporation of disintermediation and other electronic impacts in a way
that was realistic. It would also allow analysis of detailed sectoral impacts
as well as the flow on effects through the economy at large. It was also
recommended because the modellers that own and operate the model, the
Centre of Policy Studies, have considerable experience with analysis of
these kinds of issues. They operate with a framework that is open and
transparent with the framework having been subject to worldwide peer
assessment through publications in major economic journals.
The key structural assumptions and techniques used in the MONASH
model are detailed in Appendix B.
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