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The Non-constancy of Equivalence Scales


  • Conniffe, Denis


Comparisons of households of differing composition are usually achieved through the use of equivalence scales. It is we ll known that the choice of scales can have considerable impact on the conclusions drawn from studies of welfare and poverty. There is a considerable literature on the theoretical issues relating to equivalence scales, but applied work on income distribution and rela ted areas almost invariably takes scales to be constant irrespective of income. This paper focuses on the relation of scale to income by applying theoretical analysis to some simple household types. The conclusion is that scales are not constant and that current practice should be changed. Copyright 1992 by The International Association for Research in Income and Wealth.

Suggested Citation

  • Conniffe, Denis, 1992. "The Non-constancy of Equivalence Scales," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 38(4), pages 429-443, December.
  • Handle: RePEc:bla:revinw:v:38:y:1992:i:4:p:429-43

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    References listed on IDEAS

    1. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-293, March.
    2. Gary Solon & Robert Barsky & Jonathan A. Parker, 1994. "Measuring the Cyclicality of Real Wages: How Important is Composition Bias?," The Quarterly Journal of Economics, Oxford University Press, vol. 109(1), pages 1-25.
    3. Robert J. Shiller & Stefano Athanasoulis, 1995. "World Income Components: Measuring and Exploiting International Risk Sharing Opportunities," NBER Working Papers 5095, National Bureau of Economic Research, Inc.
    4. Shiller, Robert J, 1993. " Measuring Asset Values for Cash Settlement in Derivative Markets: Hedonic Repeated Measures Indices and Perpetual Futures," Journal of Finance, American Finance Association, vol. 48(3), pages 911-931, July.
    5. Gray, Jo Anna, 1976. "Wage indexation: A macroeconomic approach," Journal of Monetary Economics, Elsevier, vol. 2(2), pages 221-235, April.
    6. Bils, Mark J, 1985. "Real Wages over the Business Cycle: Evidence from Panel Data," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 666-689, August.
    7. Bewley, Truman F, 1995. "A Depressed Labor Market as Explained by Participants," American Economic Review, American Economic Association, vol. 85(2), pages 250-254, May.
    8. Cargill, Thomas F, 1969. "An Empirical Investigation of the Wage-Lag Hypothesis," American Economic Review, American Economic Association, vol. 59(5), pages 806-816, December.
    9. Peter Gottschalk & Robert Moffitt, 1994. "The Growth of Earnings Instability in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(2), pages 217-272.
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    Cited by:

    1. Olivier Bargain & Olivier Donni & Monnet Gbakou, 2010. "The Measurement of Child Costs: Evidence from Ireland," The Economic and Social Review, Economic and Social Studies, vol. 41(1), pages 1-20.
    2. Denis Conniffe & Brian Nolan & Christopher T. Whelan, 1999. "Household Composition, Living Standards, and "Needs"," Papers WP106, Economic and Social Research Institute (ESRI).
    3. Federico Perali, 2002. "Some curiosites about the Engel method to estimate equivalence scales," Economics Bulletin, AccessEcon, vol. 4(9), pages 1-7.
    4. Udo Ebert & Peter J. Lambert, 2004. "Horizontal Equity and Progression When Equivalence Scales Are Not Constant," Public Finance Review, , vol. 32(4), pages 426-440, July.
    5. Christian Dudel & Jan Marvin Garbuszus & Notburga Ott & Martin Werding, 2015. "Income Dependent Equivalence Scales, Inequality, and Poverty," CESifo Working Paper Series 5568, CESifo Group Munich.
    6. repec:ebl:ecbull:v:4:y:2002:i:9:p:1-7 is not listed on IDEAS
    7. Callan, Tim & Nolan, Brian & Whelan, Christopher T., 1996. "A Review of the Commission on Social Welfare's Minimum Adequate Income," Research Series, Economic and Social Research Institute (ESRI), number PRS29.

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