Survey Reweighting for Tax Microsimulation Modelling (WP 03/17)

Abstract

This paper describes a range of ‘minimum distance’ methods used to compute new weights for large cross-sectional surveys used in microsimulation modelling. Extraneous information about a range of population variables is used for calibration purposes. An iterative solution procedure is described and numerical examples are given, involving comparisons among alternative distance functions. An application to the New Zealand Household Economic Survey (HES) is reported.

Acknowledgements

This paper arose from Treasury modelling of hypothetical reforms to the New Zealand tax and transfer system. I should like to thank Ivan Tuckwell for helpful discussions and for providing HES data in the required form. I have also benefited from discussions with Guyonne Kalb and Nathan McClellan, and comments by Mike Doherty and Dean Hyslop on an earlier version.

Disclaimer

The views expressed in this Working Paper are those of the author(s) and do not necessarily reflect the views of the New Zealand Treasury. The paper is presented not as policy, but with a view to inform and stimulate wider debate.