Equivalence Scale Relativities Revisited

James Banks and Paul Johnson

Economic Journal, 1994, vol. 104, issue 425, 883-90

Abstract: Recent studies have assessed the impact of choice of equivalence scale on economists' measurement of the equivalent income distribution. F. A. E. Coulter, F. Cowell, and S. Jenkins (1992) has found that equivalence scales used in the U.K. official statistics 'provide lower estimates of the extent of inequality and poverty than do other scales.' In this paper, the authors demonstrate that these kind of results are dependent on the particular year of data and equivalence scale specification that is used and are not properties intrinsic to particular methodologies. Results are also not robust to the use of more recent U.K. macroeconomic data. Copyright 1994 by Royal Economic Society.

Date: 1994
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