Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/288394 
Year of Publication: 
2020
Citation: 
[Journal:] Empirical Economics [ISSN:] 1435-8921 [Volume:] 60 [Issue:] 4 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2020 [Pages:] 1629-1659
Publisher: 
Springer, Berlin, Heidelberg
Abstract: 
Equivalence scales are routinely applied to adjust the income of households of different sizes and compositions. Because of their practical importance for the measurement of inequality and poverty, a large number of methods for the estimation of equivalence scales have been proposed. Until now, however, no comprehensive comparison of current methods has been conducted. In this paper, we employ German household expenditure data to estimate equivalence scales using several parametric, semiparametric, and nonparametric approaches. Using a single dataset, we find that some approaches yield more plausible results than others while implausible scales are mostly based on linear Engel curves. The results we consider plausible are close to the modified OECD scale, and to the square root scale for larger households.
Subjects: 
Equivalence scales
Household demand
Inequality measurement
Equivalence scale exactness
Engel curves
Independence of base
JEL: 
D12
I32
C14
C21
C31
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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