METHODS OF ESTIMATING HOUSEHOLD EQUIVALENCE SCALES: AN EMPIRICAL INVESTIGATION

Julie Nelson

Review of Income and Wealth, 1992, vol. 38, issue 3, 295-310

Abstract: This paper presents empirical evidence regarding key assumptions of the Rothbarth and Barten methods of constructing household equivalence scales. The assumption of separability in the Rothbarth model is investigated by examining the implied intra‐household allocation of specific goods and by examining studies of economies of scale in household consumption. The assumption of the exogeneity of the distribution parameters in the Barten model is related to the results of empirical studies of clothing expenditures. This paper suggests that empirical evidence fails to support the assumptions maintained in these theoretically sophisticated models of household income equivalence.

Date: 1992
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