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Matching as Non-Parametric Preprocessing for the Estimation of Equivalence Scales

Author

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  • Dudel Christian

    (CESifo Research Network, CESifo GmbH, Munich, Germany; and Department of Social Science, Ruhr-Universität Bochum, Universitätsstr. 150, 44801Bochum, Germany)

  • Garbuszus Jan Marvin

    (CESifo Research Network, CESifo GmbH, Munich, Germany; and Department of Social Science, Ruhr-Universität Bochum, Universitätsstr. 150, 44801Bochum, Germany)

  • Ott Notburga

    (CESifo Research Network, CESifo GmbH, Munich, Germany; and Department of Social Science, Ruhr-Universität Bochum, Universitätsstr. 150, 44801Bochum, Germany)

  • Werding Martin

    (CESifo Research Network, CESifo GmbH, Munich, Germany; and Department of Social Science, Ruhr-Universität Bochum, Universitätsstr. 150, 44801Bochum, Germany)

Abstract

Empirically analyzing household behavior usually relies on informal data preprocessing. That is, before an econometric model is estimated, observations are selected in such a way that the resulting subset of data is sufficiently homogeneous to be of interest for the specific research question pursued. In the context of estimating equivalence scales for household income, we use matching techniques and balance checking at this initial stage. This can be interpreted as a non-parametric approach to preprocessing data and as a way to formalize informal procedures. To illustrate this, we use German micro-data on household expenditure to estimate equivalence scales as a specific example. Our results show that matching leads to results which are more stable with respect to model specification and that this type of formal preprocessing is especially useful if one is mainly interested in results for specific subgroups, such as low-income households.

Suggested Citation

  • Dudel Christian & Garbuszus Jan Marvin & Ott Notburga & Werding Martin, 2017. "Matching as Non-Parametric Preprocessing for the Estimation of Equivalence Scales," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 237(2), pages 115-141, April.
    • Handle: RePEc:jns:jbstat:v:237:y:2017:i:2:p:115-141:n:3
    DOI: 10.1515/jbnst-2017-0103
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    References listed on IDEAS

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    Cited by:

    1. Jan Marvin Garbuszus & Notburga Ott & Sebastian Pehle & Martin Werding, 2021. "Income-dependent equivalence scales: A fresh look at German micro-data," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(4), pages 855-873, December.
    2. Christian Dudel & Jan Marvin Garbuszus & Julian Schmied, 2021. "Assessing differences in household needs: a comparison of approaches for the estimation of equivalence scales using German expenditure data," Empirical Economics, Springer, vol. 60(4), pages 1629-1659, April.
    3. Jan Marvin Garbuszus & Notburga Ott & Sebastian Pehle & Martin Werding, 2018. "Development of Family Income since the 1990s: A Fresh Look at German Microdata Using Income-Dependent Equivalence Scales," SOEPpapers on Multidisciplinary Panel Data Research 987, DIW Berlin, The German Socio-Economic Panel (SOEP).

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    More about this item

    Keywords

    equivalence scales; matching; balancing; balance checking; non-parametric preprocessing; household expenditure; household behavior;
    All these keywords.

    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • D10 - Microeconomics - - Household Behavior - - - General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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