Behaviour and space in agent-based modelling: Poverty patterns in East Kalimantan, Indonesia

Applied models of policy interventions are increasingly expected to consider households' responses to these interventions, which makes agent-based modelling popular in applied policy situations. Implementing an adequate level of agent heterogeneity and mapping it into a spatial environment are critical factors of such applied modelling. However, policy applications demand the characterisation and parameterisation of behavioural response functions of heterogeneous agents and the spatial distribution of heterogeneous agents, which are neither highly transparent nor greatly tested steps in implementing agent-based models. This paper describes an agent-based model of fuel price changes for a case study in East Kalimantan, Indonesia, and specifically: (a) the characterisation and parameterisation approach, (b) resulting agent types for approximating behavioural heterogeneity, and (c) emerging spatial poverty and deforestation patterns. The model highlights the spatial dynamics of poverty dynamics, indicating that the direct impact of deforestation on poverty among forest-dwelling communities is to trigger their migration into peri-urban areas. Overall, the model suggests that poverty increases in response to fuel price reductions.