Economics - Research Publications

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Start date: 2000 × End date: 2009 × Author: CREEDY, JOHN × Author: Kalb, Guyonne × Subject: labour supply parameters ×

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    Confidence intervals for policy reforms in behavioural tax microsimulation modelling
    Creedy, J. ; Kalb, G. R. ; Kew, H. ( 2005-03)
    This paper addresses the need for a measure of the uncertaintythat is associated with the results calculated through tax policy behaviouralmicrosimulation modelling. Deriving the analytical measurewould be extremely complicated, therefore, a simulated approach isproposed which generates a pseudo sampling distribution of aggregatemeasures based on the sampling distribution of the estimated laboursupply parameters. This approach, which is very computer intensive,is compared to a more time-efficient approach where the functionalform of the sampling distribution is assumed to be normal. The resultsshow that in many instances the results from the two approachesare quite similar. The exception is when aggregate measures for minortypes of payments, involving relatively small groups of the population,are examined.