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Hypothetical Microsimulation Modeling—Farm Taxation

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Farm-Level Microsimulation Modelling

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Abstract

Tax policy is often ignored driver of farm-level decision-making. However, special incentives within tax codes have important incentives for long-term investment decisions. In this chapter, we describe the development of a microsimulation model that abstracts from the population and behavioural complexity focusing primarily on the dimension of policy complexity, specifically considering the nature of taxation policy and household income-related cash transfers as these policies apply to farms. We consider the behavioural drivers on different farm-level decisions including land access and release, animal stocking rate decisions, intergenerational decisions such as succession and inheritance and farm investment decisions. This model is classified as a hypothetical microsimulation model as, for example, is used in the International Farm Comparison Network (IFCN). It focuses on stylised farm households, considering the change in the budget set or disposable income depending upon a decision in a specific dimension for a particular farm type. The model provides a useful advantage in being able to provide analysis to incorporate some degree of heterogeneity, while abstracting from full population heterogeneity, providing a useful analytical and communication device for farm policy decisions.

Co-authored with Cathal Geoghegan, Brian Leonard and Anne Kinsella.

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Authors and Affiliations

  1. Rural Economy and Development Programme, Athenry, Galway, Ireland

    Cathal O’Donoghue

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  1. Cathal O’Donoghue
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Correspondence to Cathal O’Donoghue .

Appendix Policy Parameters

Appendix Policy Parameters

See Table 4.5

Table 4.5 Policy parameters
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O’Donoghue, C. (2017). Hypothetical Microsimulation Modeling—Farm Taxation. In: Farm-Level Microsimulation Modelling. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-63979-6_4

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  • DOI: https://doi.org/10.1007/978-3-319-63979-6_4

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  • Publisher Name: Palgrave Macmillan, Cham

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  • Online ISBN: 978-3-319-63979-6

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