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A Cross-Country Study of Equivalence Scales and Expenditure Inequality on Unit Record Household Budget Data

Author

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  • Lancaster, Geoffrey
  • Ray, Ranjan
  • Valenzuela, Maria Rebecca

Abstract

Inequality comparisons require equivalence scales to account for differences in household size and composition. The multiplicity of equivalence scale models makes the sensitivity of the inequality calculations to the scale used a significant policy issue. Such an investigation based on unit records of two adult households from Italy, Australia, South Africa, Thailand, Peru, Philippines, India and Tanzania was our principal motivation. The equivalence scale varies across countries and between different types of children. Inequality rankings of countries, though not the inequality decomposition between households of different composition, are robust to the equivalence scale used. Copyright 1999 by The International Association for Research in Income and Wealth.

Suggested Citation

  • Lancaster, Geoffrey & Ray, Ranjan & Valenzuela, Maria Rebecca, 1999. "A Cross-Country Study of Equivalence Scales and Expenditure Inequality on Unit Record Household Budget Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(4), pages 455-482, December.
  • Handle: RePEc:bla:revinw:v:45:y:1999:i:4:p:455-82
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    Cited by:

    1. Tasneem Zafar & Alfons J. Weichenrieder, 2011. "Evaluating Real World Income Distributions behind the Veil of Ignorance - How Risk Averse do You have to be to Prefer Europe over the US?," LIS Working papers 572, LIS Cross-National Data Center in Luxembourg.
    2. Miguel Szekely & Nora Lustig & Martin Cumpa & Jose Antonio Mejia, 2004. "Do we know how much poverty there is?," Oxford Development Studies, Taylor & Francis Journals, vol. 32(4), pages 523-558.
    3. Regier, Gregory & Zereyesus, Yacob & Dalton, Timothy & Amanor-Boadu, Vincent, 2015. "Do Adult Equivalence Scales Matter in Poverty Estimates? A Ghana Case Study," 2015 Conference, August 9-14, 2015, Milan, Italy 212487, International Association of Agricultural Economists.
    4. Pendakur, Krishna, 2002. "Taking prices seriously in the measurement of inequality," Journal of Public Economics, Elsevier, vol. 86(1), pages 47-69, October.
    5. Miguel Székely & Nora Lustig & Martin Cumpa & José Antonio Mejía-Guerra, 2000. "Do We Know How Much Poverty There Is?," IDB Publications (Working Papers) 1334, Inter-American Development Bank.
    6. White, Howard & Masset, Edoardo, 2002. "Child poverty in Vietnam: using adult equivalence scales to estimate income-poverty for different age groups," MPRA Paper 777, University Library of Munich, Germany.
    7. Michelini, Claudio, 1999. "The estimation of a rank 3 demand system with demographic demand shifters from quasi-unit record data of household consumption," Economics Letters, Elsevier, vol. 65(1), pages 17-24, October.
    8. Judith Streak & Derek Yu & Servaas Van der Berg, 2009. "Measuring Child Poverty in South Africa: Sensitivity to the Choice of Equivalence Scale and an Updated Profile," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 94(2), pages 183-201, November.
    9. Miguel Székely & Marianne Hilgert, 1999. "What's Behind the Inequality we Measure: An Investigation Using Latin American Data," Research Department Publications 4188, Inter-American Development Bank, Research Department.
    10. Setareh Ataian, 2011. "Analyse des dépenses en transport urbain des ménages à Téhéran," Post-Print halshs-00733368, HAL.
    11. repec:ilo:ilowps:392059 is not listed on IDEAS
    12. Ana Gil & José Molina, 2009. "Alcohol demand among young people in Spain: an addictive QUAIDS," Empirical Economics, Springer, vol. 36(3), pages 515-530, June.
    13. Burlacu, Irina S. & O'Donoghue, Cathal, 2012. "Differential Welfare State Impacts for Frontier Working Age Families," IZA Discussion Papers 6734, Institute for the Study of Labor (IZA).
    14. Thesia I. Garner & Kathleen Short, 2005. "Developing a New Poverty Line for the USA: Are There Lessons for India?," Working Papers 378, U.S. Bureau of Labor Statistics.
    15. Paul Blacklow & Ranjan Ray, 2000. "A Comparison of Income and Expenditure Inequality Estimates: The Australian Evidence, 1975-76 to 1993-94," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 33(4), pages 317-329.
    16. repec:spr:stmapp:v:10:y:2001:i:1:d:10.1007_bf02511649 is not listed on IDEAS
    17. Miguel Székely & Marianne Hilgert, 1999. "¿Qué hay detrás de la desigualdad cuantificada: investigación empleando datos de América Latina," Research Department Publications 4189, Inter-American Development Bank, Research Department.
    18. Dudel, Christian & Garbuszus, Jan Marvin & Schmied, Julian, 2017. "Assessing differences in household needs: A comparison of approaches for the estimation of equivalence scales using German expenditure data," Ruhr Economic Papers 723, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    19. Miguel Székely & Nora Lustig & Martin Cumpa & José Antonio Mejía-Guerra, 2000. "¿Sabemos qué tanta pobreza hay?," Research Department Publications 4240, Inter-American Development Bank, Research Department.
    20. Gibson, John, 2002. " Why Does the Engel Method Work? Food Demand, Economies of Size and Household Survey Methods," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(4), pages 341-359, September.
    21. Thomas F. Crossley & Krishna Pendakur, 2002. "Consumption Inequality," Department of Economics Working Papers 2002-09, McMaster University.
    22. Miguel Székely & Marianne Hilgert, 1999. "What's Behind the Inequality We Measure: An Investigation Using Latin American Data," IDB Publications (Working Papers) 1309, Inter-American Development Bank.

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