GAMS Miscellaneous Data Inputs

Data table inputs:

## TABLE MISCG(G,H,*) TAX TABLE FIGURES

· Various taxation parameters were compiled in pit0304v8.xls, and copied into this table. The definitions are as follows:

TAXBASE(G,H) DOF BASE TAX AMOUNTS

TAXBM(G,H) DOF TAX BRACKET MINIMUM

TAXCVC(G,H) DOF TAX CONSTANT TO CORRECT TO OBSERVED TAXES

TAXOD(G,H) DOF TAX OTHER DEDUCTIONS PER RETURN

TAXPI(G,H) DOF TAX PERCENT ITEMIZING

TAXSD(G,H) DOF TAX STANDARD DEDUCTIONS PER RETURN

## TABLE MISC(Z,*) MISCELLANEOUS SECTORAL DATA

· JOBS is CA employment by sector, found by averaging employment levels in EDD data over Q2 2002 through Q1 2003.

· ETAM and ETAE are the import and export elasticities for the Armington specification of trade. They follow an obvious pattern. If a sector has high import elasticity, the ETAM is assumed to equal 1.5; otherwise it is assumed to be 0.5. If a sector has high export elasticity, the ETAM is assumed to be -1.65. Otherwise it is assumed to equal -0.65.

· Sigma is the elasticity of substitution in the CES production function. If the sector has high elasticity of substitution, it is assumed to equal 0.9; otherwise it is assumed to be 0.8.

· R0 is the long run rate of return on capital. We basically followed the previous version of TABLE MISC. For current model sectors which do not have a corresponding sector in the previous version, we used the five year total return by industries from Morning Star Company to estimate a long run rate of return (http://news.morningstar.com/stockReturns/CapWtdIndustryReturns.html). To do so, we first converted the five year rate of return to an annual return to each sector by dividing by 5. We then approximated a ten-year long run return by adding in the difference of 15.8% between the ten-year and five-year average returns to the S&P 500 index. Adding the difference in returns to the calculated annual rate of return by industries produces our estimate of R0.

TABLE MISCH(H,*) MISCELLANEOUS HOUSEHOLD DATA· ETAPIT is the supply of labor wrt taxes, etatp, supply of labor wrt transfers, carried forward from the last version of the model.

· HH0 is the total number of households, and HW0, the number of working households. These values were imported from HHDistn.xls.

· ETARA is the labor supply elasticity, carried forward from previous version.

· Nrpg is the natural rate of population growth, carried forward.

· ETAYD and ETAU are immigration responsiveness parameters, same as in previous version.

TABLE TPC(H,G) FRACTION OF NON-WORKING HOUSEHOLDS COLLECTING TRANSFER PAYMENTS

· These values are copied in from the PIT0304 sheet of the g0304.xls workbook. They are guesstimates based on the guesstimates used in the previous version of the model.

## TABLE ATAX(GI1,GI) DEDUCTABILITY OF OTHER TAXES

· These are tax law parameters which remain the same from the previous version.

## TABLE TAUFF(G,F) ASSIGNMENT OF FACTOR TAXES

· These parameters were carried forward from the previous version.

PARAMETER OMEGA(F) RATE AT WHICH FACTOR PAYMENTS APPEAR IN PIT CALCULATIONS

· These parameters were carried forward from the previous version.

## TABLE ITCE(Z,Z1) ELIGIBILITY FOR INVESTMENT TAX CREDIT

· These parameters were carried forward from the previous version, except the sectors were adapted to the new model.

## TABLE LAMBDA(C,C1) OWN AND CROSS PRICE ELASTICITY PARAMENTERS

· These parameters were carried forward from the previous version.

## PARAMETER BETA(C) INCOME ELASTICITY PARAMETER

· These parameters were carried forward from the previous version.