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Add kreg bw option #34

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merged 3 commits into from
Feb 9, 2025
+7 −4
Merged

Add kreg bw option #34

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dbf73f7
Add bw option for kreg
john-p-ryan Feb 8, 2025
0aea9e0
Merge branch 'main' of https://github.com/john-p-ryan/InverseOptimalTax
john-p-ryan Feb 8, 2025
bd68572
Merge branch 'PSLmodels:main' into main
john-p-ryan Feb 9, 2025
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7 changes: 4 additions & 3 deletions iot/inverse_optimal_tax.py
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Original file line number Diff line number Diff line change
Expand Up @@ -45,6 +45,7 @@ def __init__(
kde_bw=None,
mtr_smoother="kreg",
mtr_smooth_param=1000,
kreg_bw=[120_000],
):
# keep the original data intact
self.data_original = data.copy()
Expand Down Expand Up @@ -75,7 +76,7 @@ def __init__(
self.eti = eti_spl(self.z)
# compute marginal tax rate schedule
self.mtr, self.mtr_prime = self.compute_mtr_dist(
data, weight_var, income_measure, mtr_smoother, mtr_smooth_param
data, weight_var, income_measure, mtr_smoother, mtr_smooth_param, kreg_bw
)
# compute theta_z, the elasticity of the tax base
self.theta_z = 1 + ((self.z * self.f_prime) / self.f)
Expand Down Expand Up @@ -108,7 +109,7 @@ def df(self):
return df

def compute_mtr_dist(
self, data, weight_var, income_measure, mtr_smoother, mtr_smooth_param
self, data, weight_var, income_measure, mtr_smoother, mtr_smooth_param, kreg_bw
):
"""
Compute marginal tax rates over the income distribution and
Expand Down Expand Up @@ -150,7 +151,7 @@ def compute_mtr_dist(
binned_data[income_measure].dropna(),
var_type="c",
reg_type="ll",
bw=[mtr_smooth_param * 40_000],
bw=kreg_bw,
)
mtr, _ = mtr_function.fit(self.z)
mtr_prime = np.gradient(mtr, self.z, edge_order=2)
Expand Down
4 changes: 3 additions & 1 deletion iot/iot_user.py
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Original file line number Diff line number Diff line change
Expand Up @@ -62,7 +62,8 @@ def __init__(
dist_type="log_normal",
kde_bw=None,
mtr_smoother="kreg",
mtr_smooth_param=4,
mtr_smooth_param=1000,
kreg_bw=[120_000]
):
self.income_measure = income_measure
self.weight_var = weight_var
Expand Down Expand Up @@ -111,6 +112,7 @@ def __init__(
kde_bw=kde_bw,
mtr_smoother=mtr_smoother,
mtr_smooth_param=mtr_smooth_param,
kreg_bw=kreg_bw,
)
)

Expand Down
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