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Estimating the small area effects of austerity measures in the UK

Estimating the small area effects of austerity measures in the UK
Estimating the small area effects of austerity measures in the UK
Governments across Europe are starting to implement a range of cost-cutting and income- generating programmes in order to re-balance their fiscal budgets following substantial investments in stabilising domestic financial institutions in 2008 and 2009. One method of doing this has been to increase tax rates such as the increase in VAT in the UK from 17.5% to 20% from January 1st 2011. In this paper we explore the different spatial impact of this VAT rise on household expenditure on public and private transport and communication technology from 2006 to 2016. We do this by combining three elements: an agent-based dynamic population microsimulation model that produces projected snapshots of the UK population in 2006, 2011 and 2016; an expenditure system model based on the familiar Quadratic Almost Ideal Demand System approach; and synthetic small area census tables produced by projecting historical UK census data. Taken together these elements provide a toolkit for assessing the potential spatial impact of rising taxes or prices (or both) and we use them to compare small area projections of household expenditure under two scenarios. The first is a 'no intervention' scenario where prices and income align to UK government inflation forecasts and the second is a one-off non-reversed 2.5% increase in VAT on goods and services rated at 17.5% on 1st January 2011. We present results for different areas (rural vs urban/deprived vs affluent) and for different income groups within them and discuss the potential implications for the telecommunications industry and for the usage of public and private transport.
Anderson, B.
01e98bbd-b402-48b0-b83e-142341a39b2d
de Agostini, P.
aa9bda6c-bc9c-49bf-8ea2-c14f3deaa955
Lawson, A.
64f84822-eda3-414f-a9ec-3dbdd6eb3947
Anderson, B.
01e98bbd-b402-48b0-b83e-142341a39b2d
de Agostini, P.
aa9bda6c-bc9c-49bf-8ea2-c14f3deaa955
Lawson, A.
64f84822-eda3-414f-a9ec-3dbdd6eb3947

Anderson, B., de Agostini, P. and Lawson, A. (2011) Estimating the small area effects of austerity measures in the UK. 3rd General Conference of the International Microsimulation Association, Sweden. 07 - 10 Jun 2011.

Record type: Conference or Workshop Item (Paper)

Abstract

Governments across Europe are starting to implement a range of cost-cutting and income- generating programmes in order to re-balance their fiscal budgets following substantial investments in stabilising domestic financial institutions in 2008 and 2009. One method of doing this has been to increase tax rates such as the increase in VAT in the UK from 17.5% to 20% from January 1st 2011. In this paper we explore the different spatial impact of this VAT rise on household expenditure on public and private transport and communication technology from 2006 to 2016. We do this by combining three elements: an agent-based dynamic population microsimulation model that produces projected snapshots of the UK population in 2006, 2011 and 2016; an expenditure system model based on the familiar Quadratic Almost Ideal Demand System approach; and synthetic small area census tables produced by projecting historical UK census data. Taken together these elements provide a toolkit for assessing the potential spatial impact of rising taxes or prices (or both) and we use them to compare small area projections of household expenditure under two scenarios. The first is a 'no intervention' scenario where prices and income align to UK government inflation forecasts and the second is a one-off non-reversed 2.5% increase in VAT on goods and services rated at 17.5% on 1st January 2011. We present results for different areas (rural vs urban/deprived vs affluent) and for different income groups within them and discuss the potential implications for the telecommunications industry and for the usage of public and private transport.

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Published date: June 2011
Venue - Dates: 3rd General Conference of the International Microsimulation Association, Sweden, 2011-06-07 - 2011-06-10
Organisations: Energy & Climate Change Group

Identifiers

Local EPrints ID: 350357
URI: https://eprints.soton.ac.uk/id/eprint/350357
PURE UUID: 25d59cca-0f83-4b01-a403-6d07cf1991fb
ORCID for B. Anderson: ORCID iD orcid.org/0000-0003-2092-4406

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Date deposited: 26 Mar 2013 10:13
Last modified: 14 Dec 2018 01:30

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