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Demand Based Equivalence Scale Estimates for Australia and the UK

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  • Justin van de Ven

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Abstract

This paper compares alternative approaches for estimating equivalence scales from household expenditure data. Discussion focuses upon the limitations of cross-sectional household survey data, and the implications for model estimation. Taking into consideration the biases that are associated with alternative models, a demand system with …xed price e¤ects is identi…ed as the preferred equivalence scale estimation methodology using pooled cross-sectional survey data. The relativities of household expenditure estimated for Australia and the UK are similar, and suggest that there are likely to exist larger economies of scale in the UK.

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Bibliographic Info

Paper provided by National Institute of Economic and Social Research in its series NIESR Discussion Papers with number 228.

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Date of creation: May 2004
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Handle: RePEc:nsr:niesrd:228

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