Spatial microsimulation estimates of household income

Document type
Fenton, Alex
London School of Economics
Date of publication
1 July 2016
Poverty Alleviation Welfare Benefits and Financial Inclusion, Social Policy
Social welfare
Material type

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The author  introduces spatial microsimulation (SMS), a range of techniques for estimating the local distribution
of a variable – here, household income – by combining social survey micro-data with Census or administrative population totals. The paper explains the value of these methods in social policy analysis of spatial economic differences because they measure income poverty in standard national terms. To demonstrate spatial microsimulation by iterative proportional fitting (IPF), it examines the household income distribution in London’s 33 boroughs in 2001/02 and 2011/12 .  It presents two refinements to standard IPF methods, including “multi-level IPF”, which  is found to improve the estimation of poverty rates. The paper confirms the value of SMS for synchronic spatial analysis, and advocates its use in modelling spatial differences in the effects of fiscal and welfare policy changes.

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