Can AI model economic choices?

Tax policy analysis is a well-developed field with a robust body of research and extensive modeling infrastructure across think tanks and government agencies. Because tax policy affects everyone, and especially wealthy people, it gets both a lot of attention and research funding (notably from individual foundations like those of Peter G. Peterson and Koch brothers). In addition to empirical studies, organizations like the Urban-Brookings Tax Policy Center and the Joint Committee on Taxation produce microsimulations of tax policy to comprehensively model thousands of levers of policymaking. However, because it is difficult to guess how people will react to changing public policy scenarios, these models are limited in how much they account for individual behavioral factors. Although it is far from certain, artificial intelligence (AI) might be able to help address this notable deficiency in tax policy, and recent work has highlighted this possibility.