Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/28032
Authors: 
Koulovatianos, Christos
Schröder, Carsten
Schmidt, Ulrich
Year of Publication: 
2006
Series/Report no.: 
Diskussionsbeiträge des Fachbereichs Wirtschaftswissenschaft der Freien Universität Berlin 2006/5
Abstract: 
Different family types may have a fixed flow of consumption costs, related to subsistence needs. We use a survey method in order to identify and estimate such a fixed component of spending for different families. Our method involves making direct questions about the linkup between aggregate disposable family income and well-being for different family types. Conducting our survey in six countries, Germany, France, Cyprus, China, India and Botswana, we provide evidence that fixed costs of consumption are embedded in welfare evaluations of respondents. More precisely, we find that the formalized relationship between welfare-retaining aggregate family incomes across different family types, suggested by Donaldson and Pendakur (2005) and termed 'Generalized Absolute Equivalence Scale Exactness,' is prevalent and robust in our data. We use this relationship to identify subsistence needs of different family types and to calculate income inequality.
Subjects: 
subsistence
equivalence scales
survey method
generalized equivalence scale exactness
JEL: 
I31
I32
C42
D31
D12
D63
ISBN: 
3938369310
Document Type: 
Working Paper

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