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A Subjective Well-being Equivalence Scale for Mexico: Estimation and Poverty and Income-distribution Implications

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  • Mariano Rojas

Abstract

The estimation of equivalence scales is crucial in cases where a well-being comparison of persons living under different household arrangements is needed: for example, to identify the poor, to calculate poverty rates and to estimate income inequality. In spite of the importance of equivalence scales for economic policy, there is little theoretical guidance on their estimation, and most empirical studies have been carried out in developed countries. Traditional estimation methods have been criticized because of their limitations for making welfare comparisons. This paper uses a subjective well-being approach to estimate equivalence scales. The approach provides an equivalence scale founded on economic satisfaction, which can be used to make welfare comparisons for persons living under different household arrangements—for example, in households of different sizes and with different age composition of household members. The empirical study has been carried out for Mexico using a large database. The implications of the subjective well-being scale for the assessment of poverty and income inequality in Mexico are shown on the basis of a national survey and by comparison with alternative scales.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Oxford Development Studies.

Volume (Year): 35 (2007)
Issue (Month): 3 ()
Pages: 273-293

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Handle: RePEc:taf:oxdevs:v:35:y:2007:i:3:p:273-293

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Cited by:
  1. Ravallion, Martin, 2012. "Poor, or just feeling poor ? on using subjective data in measuring poverty," Policy Research Working Paper Series 5968, The World Bank.
  2. Florian Wendelspiess Chávez Juárez, 2011. "Intergenerational transmission of education - Uncovering the mechanisms behind high intergenerational correlations," Working Papers 234, ECINEQ, Society for the Study of Economic Inequality.
  3. Mariano Rojas, 2010. "Intra-Household Arrangements and Economic Satisfaction," Journal of Happiness Studies, Springer, vol. 11(2), pages 225-241, April.

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