Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/287515 
Year of Publication: 
2021
Citation: 
[Journal:] The Journal of Economic Inequality [ISSN:] 1573-8701 [Volume:] 19 [Issue:] 4 [Publisher:] Springer US [Place:] New York, NY [Year:] 2021 [Pages:] 855-873
Publisher: 
Springer US, New York, NY
Abstract: 
Income inequality and poverty risks receive a lot of attention in public debates and current research. To make income comparable across different types of households, applying the "(modified) OECD scale" – an equivalence scale with fixed weights for each household type – has become a quasi-standard in research. Instead, we derive a base-dependent equivalence scale allowing for scale weights that vary with income, building on micro-data from Germany. Our results suggest that appropriate equivalence scales are much steeper at the lower end of the income distribution than they are for higher income levels. We illustrate our findings by applying them to data on family income differentiated by household types. It turns out that using income-dependent equivalence scales matters for applied research on income inequality, especially if one is concerned with the composition, not just the size of the population at poverty risk.
Subjects: 
Equivalence scales
Household income
Household needs
Inequality measurement
Poverty risks
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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