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Adult equivalence scales, inequality and poverty

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  • John Creedy
  • Cath Sleeman

Abstract

This paper examines the sensitivity of inequality and poverty measures to the adult equivalence scale and the unit of analysis. Comparisons are made using parametric equivalence scales, and income units include individuals, equivalent adults and households. The role of the correlation between equivalent income and household size, and the weight attached to children, is examined analytically. Empirical results are based on New Zealand Household Expenditure Survey (HES) data for total expenditure. Further results using a variety of equivalence scales, for New Zealand, Australia, the UK and the OECD, are examined.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal New Zealand Economic Papers.

Volume (Year): 39 (2005)
Issue (Month): 1 ()
Pages: 51-81

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Handle: RePEc:taf:nzecpp:v:39:y:2005:i:1:p:51-81

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  1. Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Equivalence Scale Relativities and the Extent of Inequality and Poverty," Economic Journal, Royal Economic Society, vol. 102(414), pages 1067-82, September.
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  3. Plotnick, Robert, 1981. "A Measure of Horizontal Inequity," The Review of Economics and Statistics, MIT Press, vol. 63(2), pages 283-88, May.
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  5. Attanasio, Orazio P., 1999. "Consumption," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 11, pages 741-812 Elsevier.
  6. Richard Blundell & Ian Preston, 1997. "Consumption, inequality and income uncertainty," IFS Working Papers W97/15, Institute for Fiscal Studies.
  7. Jorgenson, Dale W & Slesnick, Daniel T, 1984. "Aggregate Consumer Behaviour and the Measurement of Inequality," Review of Economic Studies, Wiley Blackwell, vol. 51(3), pages 369-92, July.
  8. Shorrocks, Anthony, 2004. "Inequality and Welfare Evaluation of Heterogeneous Income Distributions," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  9. Glewwe, Paul, 1991. "Household equivalence scales and the measurement of inequality : Transfers from the poor to the rich could decrease inequality," Journal of Public Economics, Elsevier, vol. 44(2), pages 211-216, March.
  10. John Creedy & Rosanna Scutella, 2003. "The Role of the Unit of Analysis in Tax Policy Reform Evaluations," Melbourne Institute Working Paper Series wp2003n28, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  11. Ebert, Udo, 1997. "Social Welfare When Needs Differ: An Axiomatic Approach," Economica, London School of Economics and Political Science, vol. 64(254), pages 233-44, May.
  12. Orazio P. Attanasio & Tullio Jappelli, 2000. "The life cycle hypothesis and consumption inequality," IFS Working Papers W97/17, Institute for Fiscal Studies.
  13. Jenkins, Stephen P & Cowell, Frank A, 1994. "Parametric Equivalence Scales and Scale Relativities," Economic Journal, Royal Economic Society, vol. 104(425), pages 891-900, July.
  14. Richard Blundell & Ian Preston, 1994. "Income or consumption in the measurement of inequality and poverty?," IFS Working Papers W94/12, Institute for Fiscal Studies.
  15. Anthony Shorrocks, 2004. "Inequality and welfare evaluation of heterogeneous income distributions," Journal of Economic Inequality, Springer, vol. 2(3), pages 193-218, July.
  16. André Decoster & Erwin Ooghe, 2002. "Weighting with individuals, equivalent individuals, or not weighting at all. Does it matter empirically?," Public Economics Working Paper Series ces0215, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
  17. Banks, James & Johnson, Paul, 1994. "Equivalence Scale Relativities Revisited," Economic Journal, Royal Economic Society, vol. 104(425), pages 883-90, July.
  18. Cowell, Frank A, 1984. "The Structure of American Income Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 30(3), pages 351-75, September.
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Cited by:
  1. John Creedy & Nicolas Hérault†, 2011. "Decomposing Inequality and Social Welfare Changes : The Use of Alternative Welfare Metrics," Department of Economics - Working Papers Series 1121, The University of Melbourne.
  2. John Creedy & Ross Guest, 2006. "Population Ageing And Intertemporal Consumption: Representative Agent Versus Social Planner," Department of Economics - Working Papers Series 972, The University of Melbourne.
  3. John Creedy & Jamas Enright & Norman Gemmell & Nick McNabb, 2008. "Equity and Efficiency Measures of Tax-Transfer Systems: Some Evidence for New Zealand," Treasury Working Paper Series 08/04, New Zealand Treasury.
  4. Molini, Vasco & Nubé, Maarten & van den Boom, Bart, 2010. "Adult BMI as a Health and Nutritional Inequality Measure: Applications at Macro and Micro Levels," World Development, Elsevier, vol. 38(7), pages 1012-1023, July.
  5. Creedy, John, 2013. "Alternative Distributions for Inequality and Poverty Comparisons," Working Paper Series 2851, Victoria University of Wellington, Chair in Public Finance.

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