Working Papers of the ESRC Research Centre on Micro-Social Change
June 1, 1997
No data on local taxes paid by respondents have been collected in the British Household Panel Study (BHPS) Waves 1-5. But local taxes constitute an important element of total tax liabilities for British households. This paper considers 4 ways in which council tax, the local tax system in operation during Waves 3 to 5, might be imputed for BHPS households. These range from the very simple (assume that all households' council tax liability is the same) to the more complex (impute the council tax bands into which respondents' dwellings fall, and from this calculate an 'exact' measure of council tax). The analysis shows that for the purposes of examining mobility in household incomes in Britain using the BHPS, the method used to calculate council tax is unlikely to alter results greatly. However, for studies which focus more closely on local taxation, there may be some advantages to using the more complex imputation method.