Definition
DECOMP: the function of welfare decomposition. It helps to research the welfare distortion from one sector to the whole economy
Description of DECOMP Output
- A: summarized welfare report
- A1: ALLO decomposition by traded commodities allocation, loss of efficiency
- A2: decomposition by commodity taxes
- A21: decomposition of A2
- welcnt: total welfare change
- dvol: change in volume
- taxrateb: report tax rate before the shock
- taxrateu: report tax rate after the shock
- A22: ATAX commodity tax
- A22P: tax on private consumption
- A22G: tax on government consumption
- A22F: tax on intermediate purchases
- A21: decomposition of A2
- A3: ALLO decomposition by endowment allocation
- B1: ENDW endowment supplies
- C1: TECH technical change terms
How to use DECOMP
(1) solve the model with the nonlinear solution method Gragg 3 step, because we need to re-evaluate it.
If the model is solved with Johansen approach, we will get a square instead of a triangle for the efficiency loss.
(2) Check View - updated data - Welfare decomposition
Alternatively, one may open AnalyseGE and check / evaluate / decompose the variables used in DECOMP.
Note: when solving the model, we have decomposition related variables calculated from the code in tablo file, and those codes are stored in the har file we used above.