B.1 Method used to project benchmarks
The calibration method requires four inputs: person level demographic characteristics, starting weight, weight limits and benchmarks for the aggregates of demographic and beneficiary subgroups described in Appendix Table 1. Data on person characteristics are the same as used for Taxwell with the addition of information on labour force participation.
Initial weights for the 2009/10 HES are provided by Statistics N.Z. These weights are further calibrated to administrative totals for each of the benchmarks listed above. Calibrating to projected totals of these benchmarks for future years - 2020, 2030, ... , 2060 - is an iterative process and the calibrated weights for 2009/10 are used as the starting weights for projected years.
Weight limits are added to the calibration specification to ensure that no unit record has a negative weight in the final output and that the results are not dominated by outliers with high weights. The weights were adjusted from the Taxwell starting values used for the 2009/10 year and then further adjusted to model the expected demographic and labour force participation profile of future years.
The projection methodology for the benchmarks is listed in Appendix Table 2.
| Benchmark Category | Projection Method |
|---|---|
| Age/Sex | Projected out with growth of relevant age/sex category in Population projections |
| Number of occupants | The number of people per household is kept constant, grown out with no changes in proportions of household in each occupancy type |
| Region | Grown with regional growth implied by Number of Occupants benchmark |
| Maori | Grown with age driver from age/sex population assuming constant proportion of Maori in each age group |
| Person Type | Grown with relevant age driver assuming constant proportions within each age category |
| Household Type | Grown with total growth in number of households implied by Number of Occupants, assuming constant proportions of 2 adult households |
| Tenure | Grown with regional growth implied by Region benchmark, assuming constant proportion of tenure type within region |
| Benefit | Grown with weighted demographic driver by benefit type similar to the demographic growth assumed in the Long Term Fiscal Model |
| Labour Force | Projected out with growth of relevant age/sex category in Labour Force projections |
