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Income-dependent equivalence scales and choice theory: implications for poverty measurement

In: Research Handbook on Measuring Poverty and Deprivation

Author

Listed:
  • Christos Koulovatianos
  • Carsten Schröder

Abstract

Equivalence Scales are a tool for removing the heterogeneity of household sizes in the measurement of inequality, and affect poverty assessments and poverty lines. We address the disadvantage that poor households may suffer due to their reduced ability to share goods within the household. This disadvantage is important to estimate and embed in standard analysis, as it seems to have a substantial quantitative impact on the measurement of poverty. We also suggest that future research on the role of subsistence incomes of different household types in utility functions may shed light on explanations for poverty and may guide anti-poverty policies.

Suggested Citation

  • Christos Koulovatianos & Carsten Schröder, 2023. "Income-dependent equivalence scales and choice theory: implications for poverty measurement," Chapters, in: Jacques Silber (ed.), Research Handbook on Measuring Poverty and Deprivation, chapter 4, pages 39-49, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:20574_4
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    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving

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