CHAPTER 5 - Benchmark Equilibrium Data Set  pp. 119-155

Benchmark Equilibrium Data Set

By John Piggott and John Whalley

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A benchmark equilibrium data set for the UK economy and tax system for use in calibrating the model for the year 1973 has been constructed along the lines outlined in Chapter 4. In this chapter the main features of this data set are described.

A substantial volume of data has been drawn on from different sources and reorganized in a consistent manner for our use here. In the process a data base has been generated which has value outside of the immediate study, and so a substantial amount of detail is provided in the tables which follow to provide accessibility for other potential users of the data set.

A benchmark equilibrium data set, as described in Chapter 4, is an adjusted set of basic data which meets all of the equilibrium conditions of the model. These are that demands equal supplies for all goods; no industry makes any abnormal profit; external sector transactions balance; the government budget is balanced; and lastly, household incomes equal household expenditures.

Adjustments are necessary to basic data because the information available in the National Accounts and related sources is primarily macro and production oriented. Thus, in household expenditure data reporting expenditures and incomes of individual household types, the total sum of household factor incomes after scaling to an economy-wide basis will not match the sum of factor rewards reported by industry of origin in the National Accounts.