STINMOD+

The first version of STINMOD (Static Incomes Model) was released in 1994 and was updated each year in line with the latest changes to the Commonwealth Tax and Transfer system.

STINMOD+ is the successor of the original STINMOD model and incorporates many new modelling techniques and has greatly improved the efficiency and the maintainability of the original code. The overhaul also makes it easier for other models we are developing to interact with STINMOD+ in the future. This has been a significant upgrade to the original STINMOD model, and will serve NATSEM well into the future.

Microsimulation models apply the Commonwealth Government tax and transfer rules to data at the individual and household level. This means complex Government Tax/Transfer policies can be modelled, incorporating complex interactions between different policies. The same kind of models are used extensively by the Commonwealth Government in Australia, and governments overseas.

STINMOD+ is one of the very few comprehensive and working tax/transfer microsimulation models in Australia outside of the Commonwealth, and plays an important role in conducting independent modelling of Tax/Transfer policies in Australia. NATSEM is also part of the international microsimulation community, and contributes to, and learns from, the international literature in this field.

STINMOD+ is also classified as a static microsimulation model, which means it estimates the ‘day after’ impact of a policy. This is the impact of the policy without any change in behaviour, for example, a decision to change working hours after a tax change. This is the same type of model as used by the Commonwealth to estimate the impact of proposed tax/transfer policies. One advantage of this model is that it provides quick estimates of short run effects for the policy changes that do not change economic structure significantly. However, it should not be used to estimate long term effects or for policy changes that are likely to change economic agents’ behaviour.

More information on microsimulation modelling can be found on the International Microsimulation Association (of which NATSEM is an affiliate) website, and in the Handbook of Microsimulation Modelling. In particular the chapter led by NATSEM staff members Dr Jinjing Li and Professor Ann Harding: Li , O’Donoghue , Loughrey and Harding (2014), Static Models, in O’Donoghue (ed.) Handbook of Microsimulation Modelling (Contributions to Economic Analysis, Volume 293), Emerald Group Publishing Limited, pp.47 – 75.

For more information about STINMOD contact Jinjing Li on (02) 6201 2776 or by email jinjing.li@canberra.edu.au