Models that permit policy makers to consider the effects of policy and shocks, measured over diverse circumstances and time horizons, can help quantify distributional consequences of policy and shocks, particularly the diverse consequences upon individuals, redistribution of resources and induced changes to inequality that these bring. This information can be crucially important, both during the process of designing desirable policy reforms and policies aimed at mitigating shocks, and in explaining policy to civic society.
About LINDA
LINDA (Lifetime Income Distributional Analysis) is a dynamic structural microsimulation model that accounts for responses to policy and shocks, following economic principles, but also accounting for diverse life circumstances, age/gender and external environment. It simulates individual-specific data, at discrete intervals through-out a simulated time horizon, for a representative population of the country as a whole of parts thereof, by a range of demographic and economic characteristics.
Using the UK Wealth and Assets Survey and latest census data as its base, it generates a longitudinal dataset on chosen representative samples of households (and the individuals concerned) over a set period of time into the future. This provides insight into the impacts and outcomes of the shocks and policy interventions that are being modelled.
To ensure that these microsimulation results are in-line with the aggregate macroeconomic projections in the short- to medium-run, LINDA is aligned to our global econometric model (NiGEM) and our sectoral model (NiSEM), and constitutes an integral part of NiReMS (National Institute Regional Modelling System).