I used to distribute national taxes X to households in Households Expenditure and Income Survey for measuring progressivity. I distributed all tax components by weight (distribution 1) and then divided them to weight for making household level values (distribution 2).
when I compare these two distribution, the share in deciles are different, and also when use them for progressivity analysis by weight, the results are so different! what is wrong? Please! Regards.
my syntax is:
*Allocating national tax
**Set national tax
gen totaltax= 10*10^9
**Allocating tax total tax to households
format tax %20.0fc
summ tax, format
replace tax=0 if tax==.
gen wtax= hhwt*tax
egen totwtax=sum(wtax)
gen basetax=wtax/totwtax
gen alltax=totaltax*basetax
table decile, c(mean alltax)/*(weighted distirbution 1)*/
*National tax tax calculation
gen ntaxtax=alltax/hhwt
table decile, c(mean nalltax)/*(national distirbution 2)*/
when I compare these two distribution, the share in deciles are different, and also when use them for progressivity analysis by weight, the results are so different! what is wrong? Please! Regards.
my syntax is:
*Allocating national tax
**Set national tax
gen totaltax= 10*10^9
**Allocating tax total tax to households
format tax %20.0fc
summ tax, format
replace tax=0 if tax==.
gen wtax= hhwt*tax
egen totwtax=sum(wtax)
gen basetax=wtax/totwtax
gen alltax=totaltax*basetax
table decile, c(mean alltax)/*(weighted distirbution 1)*/
*National tax tax calculation
gen ntaxtax=alltax/hhwt
table decile, c(mean nalltax)/*(national distirbution 2)*/
Comment