Weighting with individuals, equivalent individuals, or not weighting at all. Does it matter empirically?

André Decoster and Erwin Ooghe ()

Public Economics Working Paper Series from Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics

Abstract: To take into account heterogeneity in a social welfare function, Ebert (1997) and Shorrocks (1995) show that the only consistent way of welfare measurement consists of either constructing an artificial distribution in which each household is weighted by the number of equivalent individuals, or weighting by the number of individuals in the household. Both approaches are not only mutually exclusive on axiomatic grounds, they are also in sharp contrast with many empirical applications where there is no weighting at all. Since ultimately, the choice is a normative one between axioms, and hence not easily envisaged, an empirical test of the sensitivity of welfare evaluations for the choice of the different weighting schemes might prove useful. In this paper we apply the different methods to administrative microdata of the 2000 PIT reform in Belgium, obtained from the microsimulation model SIRe of the Belgian Ministery of Finance. We find indeed sensitivity of our results with respect to the different weighting methods. In addition, using the number of equivalent individuals as weights to perform dominance analysis leads to fanciful results with respect to the choice of equivalence scales.

Pages: 16 pp.
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://www.econ.kuleuven.ac.be/ew/academic/econover/Papers/DPS0215.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.econ.kuleuven.ac.be:80 (No such host is known. )

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wpe:papers:ces0215

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Public Economics Working Paper Series from Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics Contact information at EDIRC.
Bibliographic data for series maintained by Kristof Bosmans ( this e-mail address is bad, please contact ).