IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Testing the Statistical Significance of Microsimulation Results: A Plea

  • Tim Goedemé

    ()

    (Herman Deleeck Centre for Social Policy, University of Antwerp)

  • Karel Van den Bosch

    ()

    (Belgian Federal Planning Bureau, Herman Deleeck Centre for Social Policy, University of Antwerp)

  • Lina Salanauskaite

    ()

    (Herman Deleeck Centre for Social Policy, University of Antwerp)

  • Gerlinde Verbist

    ()

    (Herman Deleeck Centre for Social Policy, University of Antwerp)

In the microsimulation literature, it is still uncommon to test the statistical significance of results. In this article we argue that this situation is both undesirable and unnecessary. Provided the parameters used in the microsimulation are exogenous, as is often the case in static microsimulation of the first-order effects of policy changes, simple statistical tests can be sufficient. Moreover, standard routines have been developed which enable applied researchers to calculate the sampling variance of microsimulation results, while taking the sample design into account, even of relatively complex statistics such as relative poverty, inequality measures and indicators of polarization, with relative ease and a limited time investment. We stress that when comparing simulated and baseline variables, as well as when comparing two simulated variables, it is crucial to take account of the covariance between those variables. Due to this covariance, the mean difference between the variables can generally (though not always) be estimated with much greater precision than the means of the separate variables.

If 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.

File URL: http://www.microsimulation.org/IJM/V6_3/4_IJM_6_3_2013_goedeme.pdf
Download Restriction: no

Article provided by International Microsimulation Association in its journal International Journal of Microsimulation.

Volume (Year): 6 (2013)
Issue (Month): 3 ()
Pages: 50-77

as
in new window

Handle: RePEc:ijm:journl:v:6:y:2013:i:3:p:50-77
Contact details of provider: Web page: http://www.microsimulation.org/ijm/

References listed on IDEAS
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.:

as in new window
  1. Ericson, Peter & Flood, Lennart, 2009. "A Microsimulation Approach to an Optimal Swedish Income Tax," Working Papers in Economics 375, University of Gothenburg, Department of Economics.
  2. John Creedy & Guyonne Kalb & Hsein Kew, 2005. "Confidence Intervals for Policy Reforms in Behavioural Tax Microsimulation Modelling," Department of Economics - Working Papers Series 936, The University of Melbourne.
  3. Afshartous, David & Preston, Richard A., 2010. "Confidence intervals for dependent data: Equating non-overlap with statistical significance," Computational Statistics & Data Analysis, Elsevier, vol. 54(10), pages 2296-2305, October.
  4. Yves G. Berger & Chris J. Skinner, 2003. "Variance estimation for a low income proportion," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 52(4), pages 457-468.
  5. Atkinson, Tony & Cantillon, Bea & Marlier, Eric & Nolan, Brian, 2002. "Social Indicators: The EU and Social Inclusion," OUP Catalogue, Oxford University Press, number 9780199253494, March.
  6. Koen Decancq & Tim Goedemé & Karel Van den Bosch & Josefine Vanhille, 2013. "The Evolution of Poverty in the European Union: Concepts, Measurement and Data," ImPRovE Working Papers 13/01, Herman Deleeck Centre for Social Policy, University of Antwerp.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ijm:journl:v:6:y:2013:i:3:p:50-77. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gijs Dekkers)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.