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Comparing Incomes When Needs Differ: Equivalization For The Extra Costs Of Disability In The U.K

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  • Asghar Zaidi
  • Tania Burchardt

Abstract

Equivalization of incomes for household composition is accepted practice when measuring poverty but other variations in needs are rarely acknowledged. This paper uses data from two U.K. household surveys to quantify the extra costs of living associated with disability. The extra costs of disability are derived by comparing the “standard of living” of households with and without disabled members at a given income, having controlled for other sources of variation. Logit and ordered logit regressions are used to estimate the relationship between a range of standard of living indicators, income, and disability. The extra costs of disability derived are substantial and rise with severity of disability. Unadjusted incomes significantly understate the problem of low income amongst disabled people, and thereby in the population as a whole.

Suggested Citation

  • Asghar Zaidi & Tania Burchardt, 2005. "Comparing Incomes When Needs Differ: Equivalization For The Extra Costs Of Disability In The U.K," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(1), pages 89-114, March.
    • Handle: RePEc:bla:revinw:v:51:y:2005:i:1:p:89-114
    DOI: 10.1111/j.1475-4991.2005.00146.x
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