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GTAP Resources: Frequently Asked Question Details

Subject: FAQ

Question: I am reading the GTAP book, but I have a question about the calculation of disposable income or regional income at table 2.5 and 2.8. I don't understand why the disposable income is defined adding taxes and not deducting taxes. As I understand the market prices are the prices that take account of taxes or subsidies and agents prices are the prices that do not take account taxes or subsidies .


What the right hand takes away (through higher commodity prices and lower factor prices) the left hand must return (through the income equation).


Date Added: 3/24/2003