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Methods Of Estimating Household Equivalence Scales: An Empirical Investigation

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  • Julie A. Nelson

Abstract

This paper presents empirical evidence regarding key assumptions of the Rothbarth and Barten methods of constructing household equivalence scales. The assumption of separability in the Rothbarth model is investigated by examining the implied intra‐household allocation of specific goods and by examining studies of economies of scale in household consumption. The assumption of the exogeneity of the distribution parameters in the Barten model is related to the results of empirical studies of clothing expenditures. This paper suggests that empirical evidence fails to support the assumptions maintained in these theoretically sophisticated models of household income equivalence.

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  • Julie A. Nelson, 1992. "Methods Of Estimating Household Equivalence Scales: An Empirical Investigation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 38(3), pages 295-310, September.
  • Handle: RePEc:bla:revinw:v:38:y:1992:i:3:p:295-310
    DOI: 10.1111/j.1475-4991.1992.tb00427.x
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    Cited by:

    1. Berges, Miriam & Echeverría, Lucía & Rodríguez Biasone, Juan Ignacio, 2021. "El costo de los niños y su impacto en el presupuesto de las familias. Un análisis para Argentina," Nülan. Deposited Documents 3484, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    2. B. Douglas Bernheim & Lorenzo Forni & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1999. "The adequacy of life insurance: evidence from the health and retirement survey," Working Papers (Old Series) 9914, Federal Reserve Bank of Cleveland.
    3. Johannes Schwarze, 2000. "Using Panel Data on Income Satisfaction to Estimate the Equivalence Scale Elasticity," Discussion Papers of DIW Berlin 227, DIW Berlin, German Institute for Economic Research.
    4. B. Douglas Bernheim & Katherine Grace Carman & Jagadeesh Gokhale & Laurence J. Kotlikoff, 2001. "The Mismatch Between Life Insurance Holdings and Financial Vulnerabilities: Evidence from the Survey of Consumer Finances," NBER Working Papers 8544, National Bureau of Economic Research, Inc.
    5. Bruce Bradbury, 1996. "Household Income Sharing, Joint Consumption and the Expenditure Patterns of Australian Retired Couples and Single People," Discussion Papers 0066, University of New South Wales, Social Policy Research Centre.
    6. Bruce Bradbury, 2004. "The Price, Cost, Consumption and Value of Children," Labor and Demography 0402003, University Library of Munich, Germany.
    7. Geoffrey Lancaster & Ranjan Ray, 1998. "Comparison of Alternative Models of Household Equivalence Scales: The Australian Evidence on Unit Record Data," The Economic Record, The Economic Society of Australia, vol. 74(224), pages 1-14, March.
    8. Bruce Bradbury, 1995. "Household Semi-Public Goods and the Estimation of Consumer Equivalence Scales: Some First Steps," Microeconomics 9508001, University Library of Munich, Germany.
    9. B. Douglas Bernheim & Solange Berstein, 2002. "Saving and Life Insurance Holdings at Boston University – A Unique Case Study," Working Papers Central Bank of Chile 161, Central Bank of Chile.
    10. B. Douglas Bernheim & Lorenzo Forni & Jagadeesh Gokhale & Laurence J. Kotlikoff, 2003. "The Mismatch Between Life Insurance Holdings and Financial Vulnerabilities: Evidence from the Health and Retirement Study," American Economic Review, American Economic Association, vol. 93(1), pages 354-365, March.
    11. C. Andrea Bollino & Federico Perali & Nicola Rossi, 2000. "Linear household technologies," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(3), pages 275-287.
    12. Garcia-Diaz Rocio, 2012. "Demand-Based Cost-of-Children Estimates and Child Poverty," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-32, January.
    13. G. C. Lim & Sarantis Tsiaplias, 2015. "Financial Stress Thresholds and Household Equivalence Scales," Melbourne Institute Working Paper Series wp2015n05, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    14. Rodríguez Biasone, Juan Ignacio, 2019. "Gastos de consumo de las familias y el costo de los niños," Nülan. Deposited Documents 3150, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    15. Nandi, Alita, 2008. "Women’s economic gains from employment, marriage and cohabitation," ISER Working Paper Series 2008-23, Institute for Social and Economic Research.
    16. B. Douglas Bernheim & Lorenzo Forni & Jagadeesh Gokhale & Laurence J. Kotlikoff, 2001. "The mismatch between life insurance holdings and financial vulnerabilities: evidence from the Health and Retirement Survey," Working Papers (Old Series) 0109, Federal Reserve Bank of Cleveland.

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