An Evaluation of the Use of the Transfer Income Model (TRIM) To Analyze Welfare Programs
PAD-78-14: Published: Nov 25, 1977. Publicly Released: Nov 25, 1977.
- Full Report:
Conceptual models, simplified representations of issues, are used within Government to perform program and policy analyses of complex issues in such areas as social welfare, food, energy, and transportation. The Transfer Income Model (TRIM) was designed to provide estimates of the costs, caseloads, and income distributional effects of existing income tax and means-tested transfer programs, modifications to these programs, and proposed means-tested programs.
Since models are based on simplifications of assumptions, approximations, and judgments, the validity of results can be affected. The number of versions and modifications made it difficult to determine which TRIM version had been used for a particular policy analysis. Assumptions were made in the model to compensate for lack of accuracy, completeness, and currentness of data sources; other assumptions concerned transfer program characteristics that affect estimates. Documentation supporting the model lacked information on test results; there were some errors in the computer code; and the model was difficult to use. Since estimates made by TRIM are subject to uncertainty, the model should only be used to assess relative impacts of changes in welfare programs and as a research tool; it should not be used to provide absolute estimates. Its results should be used cautiously for long-term projections, and when developing absolute estimates, information indicating uncertainty of estimates should be provided.
Recommendation for Executive Action
Comments: Please call 202/512-6100 for additional information.
Recommendation: The Secretary of Health, Education, and Welfare should reassess the adequacy of models being used to support welfare policy analysis including: identifying and obtaining additional data needed to analyze issues; identifying corrective measures needed to make analytical tools more effective and making necessary improvements; insuring that models are well documented, updated, and reassessed; and performing periodic studies of alternative types of analytical tools. The Secretary should also develop a plan for identifying and meeting future needs for analytical tools and data to support welfare policy analysis.