A microsimulation model for belgian indirect taxes with a carbon / energy tax illustration for Belgium.

Belgium; Model; Studies;

A bounded index test for robust heterogeneous welfare comparisons.

Fleurbaey, Hagneré and Trannoy (2003) develop a bounded dominance test to make robust welfare comparisons, which is intermediate between Ebert’s (1999) cardinal dominance criterion –generalized Lorenz dominance applied to household incomes, divided and weighted by an equivalence scale– and Bourguignon’s (1989) ordinal dominance criterion. In this paper, we develop a more complete, but less robust bounded index test, which is intermediate between Ebert’s (1997) cardinal index test –an index applied to household incomes, divided and weighted by the equivalence scale– and a (new) sequential index test –an index applied to household incomes of the most needy only, the most and second most needy only, and so on. We illustrate the power of our test to detect welfare changes in Russia using data of the RLMS-surveys.Indexes; Welfare;

Evaluation of the empirical performance of two-stage budgeting AIDS, QUAIDS and Rotterdam models based on weak separability

Microsimulation models for indirect taxation require detailed underlying demand systems, in order to be policy relevant. A possible solution for the econometric problem (lack of necessary degrees of freedom) is the separability concept and the closely related notion of two-stage budgeting. In this paper, weak separability is applied on the Almost Ideal Demand System (AIDS), its quadratic extension QUAIDS and the Rotterdam model. These two-stage budgeting demand systems were estimated on Belgian time series data and were evaluated by means of a comparison of their elasticities (both partial and total), goodness-of-fit measures and their forecasting accuracy. Though the rank three QUAIDS model does not dominate the others in every respect (at least for time series data), it has nice theoretical properties which can on their own be a justification for the use of the system.

Empirical Welfare Analysis in Random Utility Models of Labour Supply

The aim of this paper is to apply recently proposed individual welfare measures in the context of random utility models of labour supply. Contrary to the standard practice of using reference preferences and wages, these measures preserve preference heterogeneity in the normative step of the analysis. They also make the ethical priors, implicit in any interpersonal comparison, more explicit. On the basis of microdata from the Socio Economic Panel (SOEP) for married couples in Germany, we provide empirical evidence about the sensitivity of the welfare orderings to different normative principles embodied in these measures. We retrieve individual and household specific preference heterogeneity, by estimating a structural discrete choice labor supply model. We use this preference information to construct welfare orderings of households according to the different metrics, each embodying different ethical choices concerning the preference heterogeneity in the consumption-leisure space. We then discuss how sensitive the assessment of a hypothetical tax reform is to the choice of metric. The chose tax reform is similar to a subsidy of social security contributions.welfare measures, labour supply, random utility, preference heterogeneity