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Construction of An Adult Equivalence Index to Measure Intra-household Inequality and Poverty: Case Study

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Sunil Kumar
Renuka Mahadevan (School of Economics, The University of Queensland)

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Abstract

More often than not, poverty and inequality measures are based on consumption expenditures of households but this does not represent the welfare of the individuals within the household and hence concern has been raised on policy formulation (Haddad and Kanbur 1990). The strong assumption for such data use has been that resources within a household are divided according to need but a growing body of literature has argued that this is not true and that consumption inequality exists within households (Sen 1984, Thomas 1990, Phipps and Burton 1995, Iversen 2003). These studies have shown that certain social configurations such as discriminations or norms against women, the earning capacity of individuals and power structure within the households (traditionally assigned or acquired through earnings) are causes of inequality within the household. When deprivations within the household are not accounted for and if these are aggregated for the whole population, the underestimation of inequality and poverty could be significant and result in gross policy neglect.

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Paper provided by School of Economics, University of Queensland, Australia in its series Discussion Papers Series with number 363.

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Date of creation: 2008
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Handle: RePEc:qld:uq2004:363

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  2. Banks, James & Johnson, Paul, 1994. "Equivalence Scale Relativities Revisited," Economic Journal, Royal Economic Society, vol. 104(425), pages 883-90, July. [Downloadable!] (restricted)
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  4. Pollak, Robert A & Wales, Terence J, 1979. "Welfare Comparisons and Equivalence Scales," American Economic Review, American Economic Association, vol. 69(2), pages 216-21, May. [Downloadable!] (restricted)
  5. Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Differences in Needs and Assessment of Income Distributions," Bulletin of Economic Research, Blackwell Publishing, vol. 44(2), pages 77-124, April.
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  7. Findlay, Ronald & Wright, Robert E, 1994. "Gender, Poverty and the Intra-household Distribution of Resources," CEPR Discussion Papers 913, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  8. Haddad, Lawrence & Kanbur, Ravi, 1990. "How Serious Is the Neglect of Intra-Household Inequality?," Economic Journal, Royal Economic Society, vol. 100(402), pages 866-81, September. [Downloadable!] (restricted)
    Other versions:
  9. Nelson, Julie A, 1988. "Household Economies of Scale in Consumption: Theory and Evidence," Econometrica, Econometric Society, vol. 56(6), pages 1301-14, November. [Downloadable!] (restricted)
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  12. Udo Ebert, 1999. "Using equivalent income of equivalent adults to rank income distributions," Social Choice and Welfare, Springer, vol. 16(2), pages 233-258. [Downloadable!] (restricted)
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  15. Pierre-Andre Chiappori & Bernard Fortin & Guy Lacroix, 2002. "Marriage Market, Divorce Legislation, and Household Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 37-72, February. [Downloadable!] (restricted)
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  16. Muellbauer, John, 1980. "The Estimation of the Prais-Houthakker Model of Equivalence Scales," Econometrica, Econometric Society, vol. 48(1), pages 153-76, January. [Downloadable!] (restricted)
  17. Lanjouw, Peter & Ravallion, Martin, 1995. "Poverty and Household Size," Economic Journal, Royal Economic Society, vol. 105(433), pages 1415-34, November. [Downloadable!] (restricted)
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  18. BLACKORBY, Charles & BOSSERT, Walter, 2004. "Interpersonal Comparisons of Well-Being," Cahiers de recherche 2004-06, Universite de Montreal, Departement de sciences economiques. [Downloadable!]
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  19. Martin Browning & P.A. Chiappori, 1996. "Efficient Intra-Household Allocations - A General Characterization and Empirical Tests," Discussion Papers 96-10, University of Copenhagen. Department of Economics.
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  20. 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. [Downloadable!] (restricted)
  21. Thomas, D., 1989. "Intra-Household Resource Allocation: An Inferential Approach," Papers 586, Yale - Economic Growth Center.
  22. Nelson, Julie A, 1993. "Household Equivalence Scales: Theory versus Policy?," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 471-93, July. [Downloadable!] (restricted)
  23. Seneca, Joseph J & Taussig, Michael K, 1971. "Family Equivalence Scales and Personal Income Tax Exemptions for Children," The Review of Economics and Statistics, MIT Press, vol. 53(3), pages 253-62, August. [Downloadable!] (restricted)
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