IDEAS home Printed from https://ideas.repec.org/a/bla/ecorec/v74y1998i224p1-14.html
   My bibliography  Save this article

Comparison of Alternative Models of Household Equivalence Scales: The Australian Evidence on Unit Record Data

Author

Listed:
  • GEOFFREY LANCASTER
  • RANJAN RAY

Abstract

The equivalence scale is an important parameter in view of its use in welfare comparisons. This paper investigates sensitivity of the scale to models, methods and commodities. The estimations range from single equation. OLS in case of Engel and Rothbarth models to maximum likelihood in case of demographic demand systems. The estimated scales from demand systems generally lie between the Engel and Rothbarth scales. The Equivalence Scale Exactness hypothesis, considered necessary for interpretation of the scale as child cost, suffers only a mild rejection. The Australian evidence suggests that rank two demand models, rejected by the data, may exaggerate child costs.

Suggested Citation

  • Geoffrey Lancaster & Ranjan Ray, 1998. "Comparison of Alternative Models of Household Equivalence Scales: The Australian Evidence on Unit Record Data," The Economic Record, The Economic Society of Australia, vol. 74(224), pages 1-14, March.
    • Handle: RePEc:bla:ecorec:v:74:y:1998:i:224:p:1-14
    DOI: 10.1111/j.1475-4932.1998.tb01899.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1475-4932.1998.tb01899.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1475-4932.1998.tb01899.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Chatterjee, Srikanta & Michelini, Claudio & Ray, Ranjan, 1994. "Expenditure Patterns and Aggregate Consumer Behaviour: Some Experiments with Australian and New Zealand Data," The Economic Record, The Economic Society of Australia, vol. 70(210), pages 278-291, September.
    2. Julie A. Nelson, 1992. "Methods Of Estimating Household Equivalence Scales: An Empirical Investigation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 38(3), pages 295-310, September.
    3. Binh, Tran Nam & Whiteford, Peter, 1990. "Household Equivalence Scales: New Australian Estimates from the 1984 Household Expenditure Survey," The Economic Record, The Economic Society of Australia, vol. 66(194), pages 221-234, September.
    4. Kakwani, Nanak C, 1977. "On the Estimation of Consumer Unit Scales," The Review of Economics and Statistics, MIT Press, vol. 59(4), pages 507-510, November.
    5. Deaton, Angus S & Muellbauer, John, 1986. "On Measuring Child Costs: With Applications to Poor Countries," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 720-744, August.
    6. Gronau, Reuben, 1991. "The Intrafamily Allocation of Goods--How to Separate the Adult from the Child," Journal of Labor Economics, University of Chicago Press, vol. 9(3), pages 207-235, July.
    7. Van Hoa, Tran, 1986. "Measuring equivalence scales : A new system-wide method," Economics Letters, Elsevier, vol. 20(1), pages 95-99.
    8. Nelson, Julie A, 1988. "Household Economies of Scale in Consumption: Theory and Evidence," Econometrica, Econometric Society, vol. 56(6), pages 1301-1314, November.
    9. Franklin M. Fisher, 1987. "Household Equivalence Scales and Interpersonal Comparisons," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 519-524.
    10. Jorgenson, Dale W & Slesnick, Daniel T, 1987. "Aggregate Consumer Behavior and Household Equivalence Scales," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(2), pages 219-232, April.
    11. Pollak, Robert A & Wales, Terence J, 1979. "Welfare Comparisons and Equivalence Scales," American Economic Review, American Economic Association, vol. 69(2), pages 216-221, May.
    12. Ray, Ranjan, 1983. "Measuring the costs of children : An alternative approach," Journal of Public Economics, Elsevier, vol. 22(1), pages 89-102, October.
    13. Muellbauer, John, 1977. "Testing the Barten Model of Household Composition Effects and the Cost of Children," Economic Journal, Royal Economic Society, vol. 87(347), pages 460-487, September.
    14. Srikanta Chatterjee & Claudio Michelini & Ranjan Ray, 1994. "Expenditure Patterns and Aggregate Consumer Behaviour: Some Experiments with Australian and New Zealand Data," The Economic Record, The Economic Society of Australia, vol. 70(210), pages 278-291, September.
    15. Tran Nam Binh & Peter Whiteford, 1990. "Household Equivalence Scales: New Australian Estimates from the 1984 Household Expenditure Survey," The Economic Record, The Economic Society of Australia, vol. 66(3), pages 221-234, September.
    16. Lewbel, Arthur, 1991. "The Rank of Demand Systems: Theory and Nonparametric Estimation," Econometrica, Econometric Society, vol. 59(3), pages 711-730, May.
    17. Deaton, Angus S & Ruiz-Castillo, Javier & Thomas, Duncan, 1989. "The Influence of Household Composition on Household Expenditure Patterns: Theory and Spanish Evidence," Journal of Political Economy, University of Chicago Press, vol. 97(1), pages 179-200, February.
    18. Pashardes, Panos, 1991. "Contemporaneous and intertemporal child costs : Equivalent expenditure vs. equivalent income scales," Journal of Public Economics, Elsevier, vol. 45(2), pages 191-213, July.
    19. Podder, N, 1971. "The Estimation of an Equivalent Income Scale," Australian Economic Papers, Wiley Blackwell, vol. 10(17), pages 175-187, December.
    20. Nelson, Julie A, 1993. "Household Equivalence Scales: Theory versus Policy?," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 471-493, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pashardes, Panos, 1995. "Equivalence scales in a rank-3 demand system," Journal of Public Economics, Elsevier, vol. 58(1), pages 143-158, September.
    2. Bruce Bradbury, 1996. "Household Income Sharing, Joint Consumption and the Expenditure Patterns of Australian Retired Couples and Single People," Discussion Papers 0066, University of New South Wales, Social Policy Research Centre.
    3. BARGAIN Olivier & DONNI Olivier, 2010. "The Measurement of Child Costs: A Rothbarth-Type Method Consistent with Scale Economies and Parents’ Bargaining," LISER Working Paper Series 2010-30, Luxembourg Institute of Socio-Economic Research (LISER).
    4. White, Howard & Masset, Edoardo, 2002. "Child poverty in Vietnam: using adult equivalence scales to estimate income-poverty for different age groups," MPRA Paper 777, University Library of Munich, Germany.
    5. Garcia-Diaz Rocio, 2012. "Demand-Based Cost-of-Children Estimates and Child Poverty," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-32, January.
    6. Valérie Lechene, 1993. "Une revue de la littérature sur les échelles d'équivalence," Économie et Prévision, Programme National Persée, vol. 110(4), pages 169-182.
    7. J. V. Meenakshi & Ranjan Ray, 1999. "Regional differences in India's food expenditure pattern: a complete demand systems approach," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(1), pages 47-74.
    8. Matthew Gray & David Stanton, 2010. "Costs of children and Equivalence Scales: A Review of Methodological Issues and Australian Estimates," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 13(1), pages 99-115.
    9. Bargain, Olivier & Donni, Olivier, 2009. "The Measurement of Child Costs: A Rothbarth-Type Method Consistent with Scale Economies," IZA Discussion Papers 4654, Institute of Labor Economics (IZA).
    10. Sunil Kumar & Renuka Mahadevan, 2008. "Construction of An Adult Equivalence Index to Measure Intra-household Inequality and Poverty: Case Study," Discussion Papers Series 363, School of Economics, University of Queensland, Australia.
    11. Jones, Andrew & O'Donnell, Owen, 1995. "Equivalence scales and the costs of disability," Journal of Public Economics, Elsevier, vol. 56(2), pages 273-289, February.
    12. Bruce Bradbury, 1995. "Household Semi-Public Goods and the Estimation of Consumer Equivalence Scales: Some First Steps," Microeconomics 9508001, University Library of Munich, Germany.
    13. Majumder, Amita & Chakrabarty, Manisha, 2003. "Relative cost of children: the case of rural Maharashtra, India," Journal of Policy Modeling, Elsevier, vol. 25(1), pages 61-76, January.
    14. Bargain, Olivier & Donni, Olivier, 2012. "Expenditure on children: A Rothbarth-type method consistent with scale economies and parents' bargaining," European Economic Review, Elsevier, vol. 56(4), pages 792-813.
    15. Tran Nam Binh & Peter Whiteford, 1990. "Household Equivalence Scales: New Australian Estimates from the 1984 Household Expenditure Survey," The Economic Record, The Economic Society of Australia, vol. 66(3), pages 221-234, September.
    16. Ursicino Carrascal Arranz, 1996. "Estimación de escalas de equivalencia de consumo mediante un modelo de demenda casi ideal (AIDS) ampliado," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 6, pages 25-38, Diciembre.
    17. C. Andrea Bollino & Federico Perali & Nicola Rossi, 2000. "Linear household technologies," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(3), pages 275-287.
    18. Martin Browning & Pierre-André Chiappori & Arthur Lewbel, 2013. "Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(4), pages 1267-1303.
    19. Lewbel, Arthur, 2003. "Calculating compensation in cases of wrongful death," Journal of Econometrics, Elsevier, vol. 113(1), pages 115-128, March.
    20. Balisacan, Arsenio M., 1992. "Equivalence Scale and Poverty Assessment in a Poor Country," Philippine Journal of Development JPD 1992 Vol. XIX No. 1-c, Philippine Institute for Development Studies.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecorec:v:74:y:1998:i:224:p:1-14. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/esausea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.