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Inequality Measures, Equivalence Scales and Adjustment for Household Size and Composition

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Author Info
Paolo Figini

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Abstract

Total household income inequality can be very different from inequality measured at the income per-capita level but only in recent years has the pattern of this divergence been investigated. In this paper, results from Coulter et al. (1992) using a one-parameter equivalence scale are updated using data for Ireland, Italy, the UK and the US. A class of two-parameter equivalence scales, representing relative weights for adults and children, is then analysed. Results are shown to depend on the distribution of household size and composition among deciles of the population. Inequality generally increases with children's weight and decreases with adults' weight. OECD and other two-parameter equivalence scales empirically used show similar results to the one-parameter equivalence scale with elasticity around 0.5.

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File URL: http://www.tcd.ie/Economics/TEP/1998/988.PDF
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Paper provided by Trinity College Dublin, Department of Economics in its series Economics Technical Papers with number 988.

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Date of creation: 1998
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Handle: RePEc:tcd:tcduet:988

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Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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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. [Downloadable!] (restricted)
  2. Champernowne, D G, 1974. "A Comparison of Measures of Inequality of Income Distribution," Economic Journal, Royal Economic Society, vol. 84(336), pages 787-816, December. [Downloadable!] (restricted)
  3. 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)
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Cited by:
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  1. Udo Ebert & Patrick Moyes, 2000. "Adjusting Incomes for Needs: Can One Avoid Equivalence Scales?," Econometric Society World Congress 2000 Contributed Papers 0917, Econometric Society. [Downloadable!]
  2. Lars Osberg & Kuan Xu, 1999. "Poverty Intensity: How Well Do Canadian Provinces Compare?," Canadian Public Policy, University of Toronto Press, vol. 25(2), pages 179-195, June. [Downloadable!] (restricted)
  3. repec:ese:iserwp: is not listed on IDEAS
  4. Udo Ebert & Patrick Moyes, 2004. "Household Decisions and Equivalence Scales," IDEP Working Papers 0404, Institut d'economie publique (IDEP), Marseille, France. [Downloadable!]
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