On the Income Dependence of Equivalence Scales

Christos Koulovatianos, Carsten Schröder and Ulrich Schmidt

University of Cyprus Working Papers in Economics from University of Cyprus Department of Economics

Abstract: We suggest a simple survey method for obtaining direct subjective estimates of equivalence scales, also appropriate for testing whether equivalence scales depend on reference-household income. We implement our approach in two countries, Germany and France. In both countries independence of base is rejected. In particular, we find that equivalence scales depend negatively on reference income, an indication of increasing economies of scale in household consumption as living standards go up. Our estimation method is non-parametric, and it allows us to test generalized equivalence-scale exactness, which is not rejected in any of our samples.

Keywords: equivalence scales; survey method; independence of base (search for similar items in EconPapers)
Pages: 41 pages
Date: 2004-02
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Citations: View citations in EconPapers (15)

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Journal Article: On the income dependence of equivalence scales (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ucy:cypeua:1-2004

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