DOI: 10.60507/fk2/cnoy41
title: Macroeconomic model (GAMS) for poverty reduction in Mexico

description: A Computable General Equilibrium (CGE) model in a bottom-up approach - based on microfoundations - and a Social Accounting Matrix (SAM) for the regional economy of Chiapas are built.

Methodology: This research applies a Computable General Equilibrium (CGE) model. It is a system of equations that describes an entire economy and all the interactions between productive sectors, commodity and factor markets, and institutions. All of the equations are solved simultaneously to find an economy-wide equilibrium in which demand and supply quantities are equal in every market at a certain level of prices (Burfisher, 2011). Two of the features of this model are that, on one hand, it implements a “bottom-up” approach, that is, it is focused on individual markets and economic agents. On the other hand, it is partially synthetic. In other words, most parameters can be calibrated with data from the SAM.

Data framework: A Social Accounting Matrix (SAM) is a balanced square matrix that represents all income and expenditure flows between productive sectors, markets, and economic agents of an economy at a given period of time (Müller, Perez & Hubertus, 2009). It is based on the double entry bookkeeping in accounting, which requires that total revenue equals total expenditure in each single account included in the SAM (Breisinger, Thomas & Thurlow, 2010). 
The main features of the Chiapas SAM are that production activities are broken down in 10 sectors, according to the North American Industry Classification System (NAICS). There is one commodity per economic activity. Factors of production are disaggregated into formal and informal labor, and capital. Direct taxes are broken up into activity tax, social security contributions, household and corporate income taxes, ‘tenencia’ tax (ownership tax, i.e. a tax associated with the possession or use of vehicles), and regional payroll tax (‘nomina’). Indirect taxes, in turn, are value-added, sales and export taxes, and import tariffs. Subsidies on production by economic activity are also included. Households are disaggregated by income quintiles. Social transfers are split in non-conditional (Procampo, universal pension, PAL-Sin Hambre , temporary employment program, and the regional program Amanecer ) and Oportunidades. The latter is also broken down into its five components: food, elderly, education, child, and energy. The introduction of conditional cash transfers in the SAM is particularly relevant because it allows assessing the impact of changes in their amount and distribution on household income, poverty reduction, income inequality, and economic growth at the regional level.
 
Data sources: 
- National Institute of Statistics and Geography (INEGI):
2012 National Employment and Occupation Survey
2013 Chiapas Statistical Yearbook
2012 National Household Income-Expenditure Survey
2012 Chiapas Statistical Perspective
2003-2012 Goods and Services Accounts (SCNM)
2003-2012 Institutional Sector Accounts (SCNM)
2008 Input-Output Table 
2008 Supply and Use Tables 
- Chiapas State Committee of Statistical and Geographical Information (CEIEG):
2012 Chiapas Employment and Occupation Survey
2012 Chiapas Monthly Statistical Reports of IMSS-insured Workers
- Federal Ministry of Labor and Social Welfare (STYPS):
2012 IMSS-registered Daily Salary by Economic Activity
2012 IMSS-insured Workers

Quality/Lineage: With the raw data a Social Accounting Matrix for the regional economy of Chiapas was built
Features:
- Oportunidades broken down by component
- Other non-conditional social transfers such as Procampo, PAL-Sin Hambre, Employment program, Universal pension, and the regional program 'Amanecer'
- Informal wages
- Satellites tables of formal and informal employment
- Productive activities according to the North American Industry Classification System (NAICS) used in Mexico, Canada, and the United States of America
- 10 economic activities
- 10 Commodities (one per economic activity)
- Factors of production: formal and informal labor and capital
Purpose: 1. To assess the opportunity cost of financing "Oportunidades", Mexico's conditional cash transfers program, and its implications for rural development and rural economic growth in the regional setting of Chiapas. Moreover,

2. Pro-growth and pro-poor tax structures are also evaluated by applying standard economic analysis tools and modeling to substantially raise the federal non-oil tax revenue to finance social policy for poverty and inequality reduction.

Dissertation:
Viveros Añorve, J. L. (2015): The opportunity cost of financing "Oportunidades": a general equilibrium assessment for poverty reduction in Mexico. Ph.D. dissertation. Center for Development Research, Faculty of Agriculture, University of Bonn
description: This dataset was first published on the institutional Repository "Zentrum für Entwicklungsforschung: ZEF Data Portal" with ID={108e6046-b7bd-4ef0-8f93-852eb27a12bf}.<br>
Sets in SAM 
A_AGRC Agriculture 
A_MING Mining 
A_UTIL Utilities 
A_CNST Construction 
A_MANU Manufacturing 
A_TRDE Trade and transport 
A_OSER Other services 
A_EDUS Education services 
A_HEAS Health services 
A_PADM Public administration 
C_AGRC Output of Agriculture 
C_MING Output of Mining 
C_UTIL Output of Utilities 
C_CNST Output of Construction 
C_MANU Output of Manufacturing 
C_TRDE Output of Trade and transport 
C_OSER Output of Other services 
C_EDUS Output of Education services 
C_HEAS Output of Health services 
C_PADM Output of Public administration 
TC_DOME Transaction cost domestic 
TC_IMPT Transaction cost imports 
TC_EXPT Transaction cost exports 
F_FLAB Formal wages 
F_ILAB Informal wages 
F_CAPR Operating surplus 
T_LBTX Labor tax 
T_PYTX Payroll tax (regional) 
T_CPTX Activity tax 
T_VATX Value-added tax 
T_SLTX Sales tax 
T_IMTX Import tariffs 
T_EXTX Export tax 
T_AMTX Tenencia tax 
T_INTX Income tax 
T_CITX Corporate income tax 
T_SBPD Subsidies on production 
I_HHD1 Household quintile 1 
I_HHD2 Household quintile 2 
I_HHD3 Household quintile 3 
I_HHD4 Household quintile 4 
I_HHD5 Household quintile 5 
I_FRMS Enterprises 
I_GOVT Government 
I_AMAN Amanecer program 
I_FOOD Oportunidades food component 
I_ELDY Oportunidades elderly component 
I_EDUC Oportunidades education component 
I_CHLD Oportunidades child component 
I_ENGY Oportunidades energy component 
I_PROC Procampo program 
I_UNPE Universal pension 
I_PALS Food program Sin-Hambre 
I_PEMT Employment program 
I_SIAC Savings-Investment account 
I_STCK Stock changes 
I_ROWD Rest of the world (rest of Mexico+Rest of world) 
I_TOTL Total