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TAXBEN: the IFS microsimulation tax and benefit model

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  • Christopher Giles

    (Institute for Fiscal Studies)

  • Julian McCrae

    (Institute for Fiscal Studies)

Abstract

A tax and benefit model is a computer program that calculates the effects of possible changes in the fiscal system on a sample of households. By using a sample which is representative of the population, such models allow users to make accurate inferences about the aggregate revenue implications of specific changes, and to examine the distributional effects of policy on different sub-groups of the population. Correspondingly, tax and benefit models play an important part in the analysis of fiscal policy in the UK and abroad. The IFS has operated a tax and benefit model of the UK, known as TAXBEN, since 1983. TAXBEN operates on data taken from the Family Expenditure Survey (FES), a yearly representative sample of 7,000 UK households. It was substantially revised in 1990, (see Johnson, Stark and Webb, 1990) and since then a range of extra features have been added which have significantly enhanced TAXBEN's power as a tool for the analysis of policy. These include new routines modelling individual's budget constraints and replacement rates which, together with closer compatibility with the IFS labour supply model, Simulation Package for the Analysis of Incentives (SPAIN, Duncan,1991), have allowed us to use TAXBEN to examine behavioural responses to policy changes. The purpose of this working paper is to document the current TAXBEN model, given the changes that have occurred since 1990.

Suggested Citation

  • Christopher Giles & Julian McCrae, 1995. "TAXBEN: the IFS microsimulation tax and benefit model," IFS Working Papers W95/19, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:95/19
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    File URL: http://www.ifs.org.uk/wps/wp1995.pdf
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    References listed on IDEAS

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    1. Russell Krelove, 1992. "Efficient Tax Exporting," Canadian Journal of Economics, Canadian Economics Association, vol. 25(1), pages 145-155, February.
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    5. Robin W. Boadway & Michael Keen, 1994. "Efficiency and the Fiscal Gap in Federal Systems," Working Papers 915, Queen's University, Department of Economics.
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    7. Boadway, Robin, 1982. "On the Method of Taxation and the Provision of Local Public Goods: Comment," American Economic Review, American Economic Association, pages 846-851.
    8. Wellisch, Dietmar, 1994. "Interregional spillovers in the presence of perfect and imperfect household mobility," Journal of Public Economics, Elsevier, pages 167-184.
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    Cited by:

    1. Ruth Hancock, 1998. "Can housing wealth alleviate poverty among Britain's older population?," Fiscal Studies, Institute for Fiscal Studies, pages 249-272.
    2. Thor O. Thoresen & Zhiyang Jia & Peter J. Lambert, 2013. "Distributional benchmarking in tax policy evaluations," Discussion Papers 765, Statistics Norway, Research Department.
    3. Stuart Adam, 2005. "Measuring the marginal efficiency cost of redistribution in the UK," IFS Working Papers W05/14, Institute for Fiscal Studies.
    4. Lydon, Reamonn & McIndoe-Calder, Tara, 2017. "The great Irish (de)leveraging 2005-14," Working Paper Series 2062, European Central Bank.
    5. Lydon, Reamonn & McIndoe-Calder, Tara, 2017. "The Great Irish (De)Leveraging 2005-14," Research Technical Papers 05/RT/17, Central Bank of Ireland.
    6. Elisa Baroni & Matteo Richiardi, 2007. "Orcutt’s Vision, 50 years on," LABORatorio R. Revelli Working Papers Series 65, LABORatorio R. Revelli, Centre for Employment Studies.

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