Guy H. Orcutt’s Engineering Microsimulation to Reengineer Society

This essay examines how microanalytic simulation (microsimulation) proposed by Guy H. Orcutt emerged as a tool in evaluating public policies. Inspired by the econometric work of Jan Tinbergen, young Orcutt harbored a “Tinbergen dream” in building a model covering the national economy. Early in his career, he had developed an analogue electrical-mechanical “regression analyzer” to calculate statistical estimates. During the mid-1950s, he shifted to micro-level data and the Monte Carlo method, and then created the first microanalytic simulation of demographic variables. After a failed trial at the University of Wisconsin, his ambitious microsimulation finally succeeded at the Urban Institute, constituted as the Dynamic Simulation of Income Model. Since the late-1970s, microsimulation have been used to understand the economic consequences of welfare and redistributive policies. As a pretrained electrical engineer and physicist, Orcutt viewed the socioeconomic system as an electrical-mechanical network. Microsimulation was an engine designed for not only scrutinizing the system but reengineering the society.