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Tax-benefit model
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Tax-benefit model
A tax-benefit model is a form of microsimulation model. It is usually based on a representative or administrative data set and certain policy rules. These models are used to cost certain policy reforms and to determine the winners and losers of reform. One example is EUROMOD, which models taxes and benefits for 27 EU states, and its post-Brexit offshoot, UKMOD.
Tax-benefit models are used by policy makers and researchers to examine the effects of proposed or hypothetical policy changes on income inequality, poverty and government budget. Their primary advantage over conventional cross-country comparison method is that they are very powerful at evaluating policy changes not only ex post, but also ex ante.
Generally, tax-benefit models can simulate income taxes, property taxes, social contributions, social assistance, income benefits and other benefits.
The underlying micro-data are obtained mainly through household surveys. These data include information about households' income, expenditure and family composition.
Most of the tax-benefit models are operated by governments or research institutions. Very few models are publicly available.
Depending on their purpose, tax-benefit models may or may not ignore behavioral responses of individuals.
The basic steps in conducting research using a simple tax-benefit model are:
A dynamic tax-benefit model PoliSim's webpage provides an illustration diagram of the process. Since this model is dynamic, it also requires data on probabilistic characteristics of the underlying population. These data would be created in step 1 and enter the model in step 2.
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Tax-benefit model AI simulator
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Tax-benefit model
A tax-benefit model is a form of microsimulation model. It is usually based on a representative or administrative data set and certain policy rules. These models are used to cost certain policy reforms and to determine the winners and losers of reform. One example is EUROMOD, which models taxes and benefits for 27 EU states, and its post-Brexit offshoot, UKMOD.
Tax-benefit models are used by policy makers and researchers to examine the effects of proposed or hypothetical policy changes on income inequality, poverty and government budget. Their primary advantage over conventional cross-country comparison method is that they are very powerful at evaluating policy changes not only ex post, but also ex ante.
Generally, tax-benefit models can simulate income taxes, property taxes, social contributions, social assistance, income benefits and other benefits.
The underlying micro-data are obtained mainly through household surveys. These data include information about households' income, expenditure and family composition.
Most of the tax-benefit models are operated by governments or research institutions. Very few models are publicly available.
Depending on their purpose, tax-benefit models may or may not ignore behavioral responses of individuals.
The basic steps in conducting research using a simple tax-benefit model are:
A dynamic tax-benefit model PoliSim's webpage provides an illustration diagram of the process. Since this model is dynamic, it also requires data on probabilistic characteristics of the underlying population. These data would be created in step 1 and enter the model in step 2.