Data and Model Cross-validation to Improve Accuracy of Microsimulation Results: Estimates for the Polish Household Budget Survey

Michal Myck and Mateusz Najsztub

International Journal of Microsimulation, 2015, vol. 8, issue 1, 33-66

Abstract: We conduct detailed analysis of the Polish Household Budget Survey data for the years 2006-2011 with the focus on its representativeness from the point of view of microsimulation analysis. We find important discrepancies between the aggregate data weighted with baseline grossing-up weights and official statistics from other sources. A number of re-weighting exercises is examined from the point of view of the accuracy of microsimulation results. We show that using a combination of variables from the data together with a small number of outcomes from the microsimulation model substantially improves the correspondence of simulation results and administrative data. While demographic re-weighting is neutral from the point of view of income distribution, calibrating the weights to adjust for income sources and tax identifiers significantly increases income inequality. We specify a number of factors which ought to be considered in the choice of weight calibration targets. Data re-weighting can substantially improve the accuracy of microsimulation but it should be used with caution.

Keywords: re-weighting; microsimulation; income inequality (search for similar items in EconPapers)
JEL-codes: D31 D63 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Related works:
Working Paper: Data and Model Cross-Validation to Improve Accuracy of Microsimulation Results: Estimates for the Polish Household Budget Survey (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ijm:journl:v:8:y:2015:i:1:p:33-66

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