IDEAS home Printed from https://ideas.repec.org/p/ags/eureia/272287.html
   My bibliography  Save this paper

Household Cost Functions And Equivalence Scales An Alternative Approach

Author

Listed:
  • van Praag, B. M. S.

Abstract

In this paper we estimated household cost functions and equivalence scales. Two versions of scales are derived, a general one and a utilityspecific one. The new feature of this paper is the methodology. With respect to method we base ourselves on direct cost assessments by respondents for various welfare levels, derived from attitude questions. We see that respondents are not able to assess the true cost function directly, but that their response behavior reveals a virtual cost function. From their response the true cost function may be derived. The alternative approach used in this paper does not make use of typical consumer surveys. The specific question needed in this paper can be plugged into any type of survey, oral or written. Linked with a few background data on income and family size it serves its purpose. A straightforward generalization of 'this method lies at hand. The same method can be used to develop and estimate equivalence scales for other factors.

Suggested Citation

  • van Praag, B. M. S., 1984. "Household Cost Functions And Equivalence Scales An Alternative Approach," Econometric Institute Archives 272287, Erasmus University Rotterdam.
  • Handle: RePEc:ags:eureia:272287
    DOI: 10.22004/ag.econ.272287
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/272287/files/erasmus163.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.272287?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. 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.
    2. Van Praag, Bernard, 1971. "The welfare function of income in Belgium: An empirical investigation," European Economic Review, Elsevier, vol. 11(3), pages 337-369.
    3. Ray, Ranjan, 1983. "Measuring the costs of children : An alternative approach," Journal of Public Economics, Elsevier, vol. 22(1), pages 89-102, October.
    4. van Praag, Bernard M S & Hagenaars, Aldi J M & van Weeren, Hans, 1982. "Poverty in Europe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 28(3), pages 345-359, September.
    5. Kilpatrick, Robert W, 1973. "The Income Elasticity of the Poverty Line," The Review of Economics and Statistics, MIT Press, vol. 55(3), pages 327-332, August.
    6. Reuben Gronau, 1974. "The Effect of Children on the Housewife's Value of Time," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 457-490, National Bureau of Economic Research, Inc.
    7. van Praag, Bernard & Goedhart, Theo & Kapteyn, Arie, 1980. "The Poverty Line-A Pilot Survey in Europe," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 461-465, August.
    8. Lazear, Edward P & Michael, Robert T, 1980. "Family Size and the Distribution of Real Per Capita Income," American Economic Review, American Economic Association, vol. 70(1), pages 91-107, March.
    9. Pollak, Robert A & Wachter, Michael L, 1975. "The Relevance of the Household Production Function and Its Implications for the Allocation of Time," Journal of Political Economy, University of Chicago Press, vol. 83(2), pages 255-277, April.
    10. Tom Wansbeek & Arie Kapteyn, 1983. "Tackling Hard Questions by Means of Soft Methods: The Use of Individual Welfare Functions in Socio‐Economic Policy," Kyklos, Wiley Blackwell, vol. 36(2), pages 249-269, May.
    11. Van Praag, Bernard M. S. & Kapteyn, Arie, 1973. "Further evidence on the individual welfare function of income: An empirical investigatiion in The Netherlands," European Economic Review, Elsevier, vol. 4(1), pages 33-62, April.
    12. John Muellbauer, 1974. "Inequality Measures, Prices and Household Composition," Review of Economic Studies, Oxford University Press, vol. 41(4), pages 493-504.
    13. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    14. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, October.
    15. Wansbeek, Tom & Kapteyn, Arie, 1983. "Tackling Hard Questions by Means of Soft Methods: The Use of Individual Welfare Functions in Socio-Economic Policy," Kyklos, Wiley Blackwell, vol. 36(2), pages 249-269.
    16. Theo Goedhart & Victor Halberstadt & Arie Kapteyn & Bernard van Praag, 1977. "The Poverty Line: Concept and Measurement," Journal of Human Resources, University of Wisconsin Press, vol. 12(4), pages 503-520.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Krishna Pendakur, 2018. "Welfare analysis when people are different," Canadian Journal of Economics, Canadian Economics Association, vol. 51(2), pages 321-360, May.

    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. Amiel, Yoram, 1998. "The subjective approach to the measurement of income inequality," LSE Research Online Documents on Economics 6595, London School of Economics and Political Science, LSE Library.
    2. Bernard M. S. van Praag & Nico L. van der Sar, 1988. "Household Cost Functions and Equivalence Scales," Journal of Human Resources, University of Wisconsin Press, vol. 23(2), pages 193-210.
    3. repec:eee:labchp:v:1:y:1986:i:c:p:273-304 is not listed on IDEAS
    4. Ferrer-i-Carbonell, Ada & van Praag, Bernard M. S., 2001. "Poverty in the Russian Federation," IZA Discussion Papers 259, Institute of Labor Economics (IZA).
    5. Maria Cracolici & Francesca Giambona & Miranda Cuffaro, 2014. "Family Structure and Subjective Economic Well-Being: Some New Evidence," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 118(1), pages 433-456, August.
    6. Arie Kapteyn & Peter Kooreman & Rob Willemse, 1988. "Some Methodological Issues in the Implementation of Subjective Poverty Definitions," Journal of Human Resources, University of Wisconsin Press, vol. 23(2), pages 222-242.
    7. Yoram Amiel, 1998. "The Subjective Approach to the Measurement of Income Inequality (published in Handbook of Income Inequality Measurement, J Silber (ed), Kluwer Academic Publishers (1999), pp.227-241)," STICERD - Distributional Analysis Research Programme Papers 38, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    8. Tine Stanovnik & Miroslav Verbic, 2004. "Perception of Income Satisfaction: An Analysis of Slovenian Households," HEW 0408003, University Library of Munich, Germany.
    9. Ada Ferrer-i-Carbonell & Bernard Van Praag, 2001. "Poverty in Russia," Journal of Happiness Studies, Springer, vol. 2(2), pages 147-172, June.
    10. van Praag, Bernard M. S., 1991. "Ordinal and cardinal utility : An integration of the two dimensions of the welfare concept," Journal of Econometrics, Elsevier, vol. 50(1-2), pages 69-89, October.
    11. Melanie Borah & Andreas Knabe & Kevin Pahlke, 2021. "Parental time restrictions and the cost of children: insights from a survey among mothers," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(1), pages 73-95, March.
    12. Johannes Schwarze, 1994. "Subjective Measures of Economic Well-Being and the Influence of Income Uncertainty," Discussion Papers of DIW Berlin 94, DIW Berlin, German Institute for Economic Research.
    13. Bernard M.S. van Praag, 2004. "The Connexion Between Old and New Approaches to Financial Satisfaction," CESifo Working Paper Series 1212, CESifo.
    14. Hovi, Matti & Laamanen, Jani-Petri, 2021. "Income, aspirations and subjective well-being: International evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 287-302.
    15. Charlier, E., 1997. "Equivalence Scales for the Former West Germany," Other publications TiSEM eed8f5af-8f69-445e-94df-d, Tilburg University, School of Economics and Management.
    16. Patricia Apps & Ray Rees, 2022. "Inequality measurement and tax/transfer policy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(4), pages 953-984, August.
    17. Javier Ruiz-Castillo, 1995. "Income distribution and social welfare: a review essay," Investigaciones Economicas, Fundación SEPI, vol. 19(1), pages 3-34, January.
    18. Ismael Ahamdanech-Zarco & John A. Bishop & Andrew Grodner & Haiyong Liu, 2011. "Subjective poverty equivalence scales for Euro Zone countries," Working Papers 233, ECINEQ, Society for the Study of Economic Inequality.
    19. Pradhan, Menno & Ravallion, Martin, 1998. "Measuring poverty using qualitative perceptions of welfare," Policy Research Working Paper Series 2011, The World Bank.
    20. Koulovatianos, Christos & Schroder, Carsten & Schmidt, Ulrich, 2005. "On the income dependence of equivalence scales," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 967-996, June.
    21. Tomasz Panek & Jan Zwierzchowski, 2013. "Porównawcza analiza sfery ubóstwa w krajach UE w ujêciu regionalnym," Working Papers 59, Institute of Statistics and Demography, Warsaw School of Economics.

    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:ags:eureia:272287. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/feeurnl.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.