Family-Type Subsistence Incomes
AbstractDifferent family types may have a fixed flow of consumption costs, related to subsistence needs. We use a survey method in order to identify and estimate such a fixed component of spending for different families. Our method involves making direct questions about the linkup between aggregate disposable family income and well-being for different family types. Conducting our survey in six countries, Germany, France, Cyprus, China, India and Botswana, we provide evidence that fixed costs of consumption are embedded in welfare evaluations of respondents. More precisely, we find that the formalized relationship between welfare-retaining aggregate family incomes across different family types, suggested by Donaldson and Pendakur (2005) and termed “Generalized Absolute Equivalence Scale Exactness,” is prevalent and robust in our data. We use this relationship to identify subsistence needs of different family types and to calculate income inequality.
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Bibliographic InfoPaper provided by University of Vienna, Department of Economics in its series Vienna Economics Papers with number 0602.
Date of creation: Feb 2006
Date of revision:
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Web page: http://www.univie.ac.at/vwl
Other versions of this item:
- I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
- C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-02-26 (All new papers)
- NEP-CNA-2006-02-26 (China)
- NEP-CWA-2006-02-26 (Central & Western Asia)
- NEP-SEA-2006-02-26 (South East Asia)
- NEP-TRA-2006-02-26 (Transition Economics)
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