Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192278 
Authors: 
Year of Publication: 
2001
Series/Report no.: 
Discussion Papers No. 296
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
A common approach to defining equivalence scales is to consider a household modelled as if it maximizes a single utility function. This may be founded on an assumption of the household maximizing a welfare function of individual utilities. For a positive analysis of the household, this may be appropriate, but it is argued that basing inter-household comparisons of welfare on this approach is generally not valid. The household will generally put different weight on the utility of the various household members, and this weighting does not necessarily correspond to society's aggregation of utility. This complication is called the Pangloss problem. An alternative definition of equivalence scales taking this into account is introduced and discussed.
Subjects: 
Equivalence scales
household
welfare function
Pangloss problem
intra-household distribution
children
JEL: 
D11
D12
D31
D63
Document Type: 
Working Paper

Files in This Item:
File
Size
183.36 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.