Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/147377
Authors: 
Borah, Melanie
Knabe, Andreas
Kuhställer, Carina
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 6123
Abstract: 
We estimate household equivalence scales using income satisfaction data from the German Socio-Economic Panel. We extend previous studies applying this approach by taking reference income into account. This allows separating needs-based from reference effects in the determination of income satisfaction. We show that this adjustment helps to overcome a bias causing an overestimation of adults' and an underestimation of children's needs-based equivalence weights. Our results indicate that controlling for income comparisons eliminates the gap between equivalence scale parameters for adults and children found in other studies.
Subjects: 
equivalence scale
income satisfaction
relative income
JEL: 
I32
J13
D31
Document Type: 
Working Paper

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