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Micro-simulation and Multi-decomposition: A Case Study: Philippines

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  • Luc Savard

    ()
    (GREDI, Département d'économique, Université de Sherbrooke)

  • Stéphane Mussard

    ()
    (GREDI, Université de Sherbrooke and Université de Perpignan G1K 7P4)

Abstract

This article combines computable general equilibrium (CGE) micro-simulation modeling and the Gini multi-decomposition analysis. The CGE-micro-simulation approach enables one to generate endogenous income distributions following government policy interventions. The introduction of these endogenous distributions into the Gini multi-decomposition, that merges income source and subgroup decompositions, provides powerful information to decision makers, which analyze the trade-off between inequality and efficiency whereas Gini multi-decomposition is usually applied in a partial equilibrium context. This is done by imposing the assumption that either the income or the price effects are exogenous.

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File URL: http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-0502.pdf
File Function: First version, 2005
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Bibliographic Info

Paper provided by Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke in its series Cahiers de recherche with number 05-02.

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Length: 31 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:shr:wpaper:05-02

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Keywords: ; Micro-simulation; Multi-decomposition; Philippines.;

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  1. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-25, April.
  2. Rolf Aaberge & Ugo Colombino & Erling Holmøy & Birger Strøm & Tom Wennemo, 2004. "Population ageing and fiscal sustainability: An integrated micro-macro analysis of required tax changes," CHILD Working Papers wp06_04, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  3. Pyatt, Graham, 1976. "On the Interpretation and Disaggregation of Gini Coefficients," Economic Journal, Royal Economic Society, vol. 86(342), pages 243-55, June.
  4. Decaluwe, B. & Patry, A. & Savard, L. & Thorbecke, E., 1999. "Poverty Analysis Within a General Equilibrium Framework," Papers 9909, Laval - Recherche en Politique Economique.
  5. Silber, Jacques, 1989. "Factor Components, Population Subgroups and the Computation of the Gini Index of Inequality," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 107-15, February.
  6. Dagum, Camilo, 1997. "A New Approach to the Decomposition of the Gini Income Inequality Ratio," Empirical Economics, Springer, vol. 22(4), pages 515-31.
  7. Shaohua Chen & Martin Ravallion, 2004. "Welfare Impacts of China's Accession to the World Trade Organization," World Bank Economic Review, World Bank Group, vol. 18(1), pages 29-57.
  8. François Bourguignon & Anne-Sophie Robilliard & Sherman Robinson, 2003. "Representative versus real households in the macro-economic modeling of inequality," Working Papers DT/2003/10, DIAL (Développement, Institutions et Mondialisation).
  9. Luc Savard, 2003. "Poverty and Income Distribution in a CGE-Household Micro-Simulation Model: Top-Down/Bottom Up Approach," Cahiers de recherche 0343, CIRPEE.
  10. Fei, John C H & Rainis, Gustav & Kuo, Shirley W Y, 1978. "Growth and the Family Distribution of Income by Factor Components," The Quarterly Journal of Economics, MIT Press, vol. 92(1), pages 17-53, February.
  11. Rutherford, Thomas & Tarr, David & Shepotylo, Oleksandr, 2005. "Poverty effects of Russia's WTO accession : modeling"real"households and endogenous productivity effects," Policy Research Working Paper Series 3473, The World Bank.
  12. Fougere, Maxime & Merette, Marcel, 1999. "Population ageing and economic growth in seven OECD countries," Economic Modelling, Elsevier, vol. 16(3), pages 411-427, August.
  13. Magnac, Th, 1991. "Segmented or Competitive Labor Markets," Econometrica, Econometric Society, vol. 59(1), pages 165-87, January.
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