THE NEW SCIENCE OF PLEASURE Daniel L. McFadden NBER Working Paper 18687

Assignment Four - Big Data & Marketing Analytics MKT563

Student No : 94040609

Trish Anderson

The Maranguka Justice Reinvestment (JR) project is a community led program that demonstrates how the redirection of government funding into community programs can address underlying issues which lead to crime in the community (KPMG, 2018). This interactive model shows how the redirection of funding from the Justice System into Community Programs improves the rate of year 12 graduates, reduces the number of incidents of domestic violence whilst reducing the number of days spent in custody. This model also shows how investment in Community Programs leads to positive economic impacts for the Community as well as cost savings for the Justice System over time.

One of the key findings of the Maranguka JP project found that redirecting funding from the Justice system into the Community has multiple benefits. This model begins with NSW government funding on a scale from 0 to 1000 which can be adjusted using the sliders based on available funding, sliding the scale to the right increases the available funding. The % Community Funding and % Justice System Funding variables can then be adjusted in the sliders to determine how much of the funding goes to the community as a percentage and how much of the available funding gets allocated to the justice system.  

Investment into Community Programs is made available by the investments into the Bourke community.  Community Leaders in the Bourke Community develop programs and each program has shown to have a positive impact on the number of students graduating year 12 in the community, the number of domestic violence incidents and the number of days spent in custody.

The current number of Year 12 graduates, the current number of domestic violence incidents and the current number of days in Custody are input into the sliders on the hand panel and the model simulation will show how these figures are impacted through investment in the community over time. These variables also contribute to the growth of Youth Development, Family Strength and Adult Empowerment in the community. These factors result in reinvestment opportunities, which have positive economic impacts on the community. Savings are also passed back to the justice system as underlying issues in the community are addressed over time.

The slider scale on the right hand panel uses six adjustable variables to model how the rate of investment in the community can impact the rate of positive impacts in the community and the rate of reinvestment opportunities that can be achieved. Running the simulation will show the larger the % of Community Funding, the faster the results can be seen over time and the greater the economic impact and justice system savings will be. The smaller the % Community Funding will show how impacts are still positive but occur over a longer period of time.

% Community Funding and % Justice System are a percentage of funding whereas NSW Government Funding is represented in dollars ($). NSW Government Funding is on a scale from 0 to 1000 but the assumed scale is $000’s, where 1,000 equals $1,000,000.

With community funding, the amount of Year 12 graduates increases by 31% (KPMG, 2018)

With community funding, the number of Domestic Violence incidents decreases by 23% (KPMG, 2018) (KPMG, 2018)

With community funding, the number of days spent in custody decreases by 42% KPMG, 2018)

Reinvestment opportunities contribute to 1/3 of economic impacts back the community where 2/3 of the reinvestment opportunities contribute to savings within the Justice System KPMG, 2018).

The rate of impact on year 12 graduating students, Domestic Violence Incidents and Days spent in custody changes at the same rate of % Community Funding available to the community.

Backing Bourke: How a radical new approach is saving young people from a life of crime. (Thompson, G). abc.net.au.

KPMG. (2018). Maranguka Justice Reinvestment Project Impact Assessment. Retrieved from https://www.justreinvest.org.au/wp-content/uploads/2018/11/Maranguka-Justice-Reinvestment-Project-KPMG-Impact-Assessment-FINAL-REPORT.pdf

Government Spending at a certain point leads to spending in excess of tax receipts. This will automatically lead to the issue of treasuries in the belief that the excess spending must be financed by borrowing (although the government has the capacity to create  money). This in turn will increase the national debt.

 Consequences that follow from this practice:

1) That national debt increases whenever the government spends in excess of tax receipts.

2) That the government must pay interest on the debt issued, which in turn increases and reinforces the need for government spending.

3) That the interest paid on treasuries will increase private sector income.

There is an alternative view, supported by Modern Monetary Theory, of how government spending can proceed. Please see this  Insight: 

https://insightmaker.com/insight/19954

This paper aims at describing a case where system dynamics modeling was used to evaluate the effects of information and material supply lead-time variation on sales contributions margins and operating cash conversion cycle of a commodity export business.  An empirical dynamic model, loaded with econometric theory of price effect on competitive demand, was used to describe the input data.  The model simulation outputs proved themselves relevant in analyzing the complex interconnections of multiple variables affecting  the profitability in a commercial routine, supporting the decision process among sales managers.

You now have the basics for defining your Action Model / Systemigram.  

1. Gather all the information you have so far:  PQR, CATWOE and the Root Definition.
2. Write down three groups of activities:  
   1. Things that concern what is being transformed (where you are starting).
   2. Activities that do the actual transforming.
   3. Activities dealing with the transformed entity
3. Connect the activities with arrows that indicate the dependencies.
4. For the SSM approach, add the three monitoring and control activities like that shown here (from the SSM reading)