Social Welfare Incidence Model (SWIM)
SWIM is a microsimulation model that takes changes in prices and quantities for goods and services and for sources of income as predicted by other economic models, and maps them to effects on a variety of households.
About the Model
Any carbon pricing scheme will generate changes in incomes and prices of goods and services, which will affect different types of households in different ways depending on its portfolio of consumption goods and income sources. These effects will vary depending on both the level of the carbon price and the method of recycling the tax revenue. Such differences are important to legislative bodies considering adoption of carbon pricing, including sub-national regional, state or local bodies.
The Social Welfare Incidence Model (SWIM) is a microsimulation model that takes changes in prices and quantities for goods and services and for sources of income (e.g., interest rates, wages, etc.) as predicted by other economic models, and maps them to effects on a variety of households, distinguished by characteristics such as income or state of residence, urban-rural residence, and other dimensions such as age of head of household. SWIM is used in conjunction with the partial equilibrium Haiku model of electricity generation, the E4ST electricity model, and the general equilibrium E3 and DR-GEM models. SWIM uses data from the Consumer Expenditure Survey (CE), the State Energy Data System (SEDS), the National Income and Product Accounts (NIPA), and estimates from the Congressional Budget Office (CBO).
When coupled with a general equilibrium model such as the E3 model or the DR-GEM model, these data sources are used to estimate the full range of consumer and producer surplus changes that accrue to households in each income quintile and state. When coupled with a partial equilibrium model, these data are used to estimate such surplus changes only for the goods, services, or income sources that are included in that model.
Darius Gaskins Senior Fellow
Dallas Burtraw is a Darius Gaskins senior fellow at RFF. Burtraw’s research includes analysis of the distributional and regional consequences of climate policy and the evolution of electricity markets including renewable integration.
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