Combining CGE and microsimulation models: Effects on equality of VAT reforms
The effects on the degree of equality of reforms in indirect taxation are analysed by using a microsimulation model of the Norwegian economy subsequent to a CGE model. The two main reforms studied are substitution of a uniform VAT rate on all goods and services and substitution of the non-uniform Norwegian VAT reform of 2001 for the previous, differentiated system. A main characteristic of the non-uniform reform is the halving of the VAT rate on food. All reforms are made public revenue neutral by changes in the VAT rate. Producer prices, pre-tax nominal incomes, wealth and transfers are all exogenous in the microsimulation model. In this paper we feed percentage changes in corresponding variables from the CGE model into the microsimulation model in order to enrich the microsimulation analyses. The non-uniform VAT reform leads to a clear increase in equality while the change in equality concerning the uniform reform is close to 0. With the uniform VAT reform, as opposed to the non-uniform, decompositions show that taking CGE effects into account has a large impact on the degree of equality. Changed producer prices and changed pre-tax nominal incomes, wealth and transfers both contribute to this.
|Date of creation:||Oct 2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (+47) 21 09 00 00
Fax: (+47) 21 09 49 73
Web page: http://www.ssb.no/en/
More information through EDIRC
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.:
- Sherman, Robinson & Robilliard, Anne-Sophie & Bourguignon, François, 2005.
"Representative versus real households in the macro-economic modelling of inequality,"
Economics Papers from University Paris Dauphine
123456789/4535, Paris Dauphine University.
- 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).
- François Bourguignon & Anne-Sophie Robilliard & Sherman Robinson, 2003. "Representative versus real households in the macro-economic modeling of inequality," DELTA Working Papers 2003-05, DELTA (Ecole normale supérieure).
- Sen, Amartya, 1974. "Informational bases of alternative welfare approaches : Aggregation and income distribution," Journal of Public Economics, Elsevier, vol. 3(4), pages 387-403, November.
- 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.
- 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," Discussion Papers 367, Statistics Norway, Research Department.
- Davies, James B & St-Hilaire, France & Whalley, John, 1984. "Some Calculations of Lifetime Tax Incidence," American Economic Review, American Economic Association, vol. 74(4), pages 633-49, September.
- Aaberge, Rolf, 2001. "Axiomatic Characterization of the Gini Coefficient and Lorenz Curve Orderings," Journal of Economic Theory, Elsevier, vol. 101(1), pages 115-132, November.
- Bye, Brita, 2000. "Environmental Tax Reform and Producer Foresight: An Intertemporal Computable General Equilibrium Analysis," Journal of Policy Modeling, Elsevier, vol. 22(6), pages 719-752, November.
- Bye, Brita & Avitsland, Turid, 2003. "The welfare effects of housing taxation in a distorted economy: a general equilibrium analysis," Economic Modelling, Elsevier, vol. 20(5), pages 895-921, September.
- Aasness,J. & Fjaerli,E. & Gravningsmyhr,H.A. & Kleive Holmoy,A.M. & Lian,B., 1995. "The Norwegian Microsimulation Model Lotte:Applications to Personal and Corporate Taxes and Social Security Benefits," Cambridge Working Papers in Economics 9533, Faculty of Economics, University of Cambridge.
- Bojer, Hilde, 1977. "The effect on consumption of household size and composition," European Economic Review, Elsevier, vol. 9(2), pages 169-193.
- Jørgen Aasness & Torstein Bye & Hans Terje Mysen, 1995.
"Welfare Effects of Emission Taxes in Norway,"
148, Statistics Norway, Research Department.
- Nelson, Julie A, 1993. "Household Equivalence Scales: Theory versus Policy?," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 471-93, July.
- Davies, James B., 2004. "Microsimulation, CGE and Macro Modelling for Transition and Developing Economies," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Tor Jakob Klette, 1994. "Estimating Price- Cost Margins and Scale Economies from a Panel of Microdata," Discussion Papers 130, Statistics Norway, Research Department.
When requesting a correction, please mention this item's handle: RePEc:ssb:dispap:392. 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: (J Bruusgaard)
If references are entirely missing, you can add them using this form.