Econometric flexibility in microsimulation: an age-centred regression approach
AbstractThis paper describes a strategy for estimating predictive equations that has been shown to work well in microsimulation modelling. The technique, referred to here as ?age-centred regression,? is particularly useful when the available data set for estimating a model equation is limited and the marginal effect of one or more explanatory variables might be expected to vary systematically by age. The examples used here to describe how age-centring works are taken from the labour supply equations in the Congressional Budget Office Long-Term (CBOLT) dynamic microsimulation model. By switching from a traditional single-equation approach to age-centred regression, we show that marginal effects of independent variables can vary significantly across age groups. The comparison also reveals that improvements in mean predictions by age can be achieved with little if any loss in statistical precision of coefficient estimates.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Interational Microsimulation Association in its journal International Journal of Microsimulation.
Volume (Year): 2 (2009)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://ima.natsem.canberra.edu.au/index.htm
age-centred regression; heterogeneity; spline; kernel;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Soest, A.H.O. van & Das, J.W.M. & Gong, X., 2001.
"A Structural Labour Supply Model with Flexible Preferences,"
Open Access publications from Tilburg University
urn:nbn:nl:ui:12-119390, Tilburg University.
- van Soest, Arthur & Das, Marcel & Gong, Xiaodong, 2002. "A structural labour supply model with flexible preferences," Journal of Econometrics, Elsevier, vol. 107(1-2), pages 345-374, March.
- Harris, Amy Rehder & Simpson, Michael, 2005. "Winners and Losers under Various Approaches to Slowing Social Security Benefit Growth," National Tax Journal, National Tax Association, vol. 58(3), pages 523-43, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gijs Dekkers).
If references are entirely missing, you can add them using this form.