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Cross-Sectional and Longitudinal Equivalence Scales for West Germany Based on Subjective Data on Life Satisfaction


  • Jürgen Faik


The present study calculates variable, cross-sectional as well as longitudinal equivalence scales on the basis of the German 1984-2010 Socio-Economic Panel (SOEP) database for West Germany. It follows the "individual variant" for calculating subjective equivalence scales using "life satisfaction" as a proxy variable for "utility". The cross-sectional scale estimates are characterized by relatively low scale values which is typical for the subjective scale approach. As a further main result, the estimated longitudinal equivalence scales reveal some but rather slight cohort-specific scale differences. Especially, the unsatisfactory fit of the paper's regressions points to the need for more research activities in this strand of social science research. The latter must be emphasized since equivalence scales are very important for social policy. Specifically, this holds true for longitudinal scales in order to capture cohort effects and, thus, to deal with intra- andintergenerational aspects of well-being (and corresponding differences).

Suggested Citation

  • Jürgen Faik, 2013. "Cross-Sectional and Longitudinal Equivalence Scales for West Germany Based on Subjective Data on Life Satisfaction," SOEPpapers on Multidisciplinary Panel Data Research 575, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp575

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    References listed on IDEAS

    1. Pollak, Robert A & Wales, Terence J, 1979. "Welfare Comparisons and Equivalence Scales," American Economic Review, American Economic Association, vol. 69(2), pages 216-221, May.
    2. Jürgen Faik & Jens Becker, 2009. "Subjektive und objektive Lebenslagen von Arbeitslosen," SOEPpapers on Multidisciplinary Panel Data Research 255, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. Apps, Patricia & Savage, Elizabeth, 1989. "Labour supply, welfare rankings and the measurement of inequality," Journal of Public Economics, Elsevier, vol. 39(3), pages 335-364, August.
    4. Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Differences in Needs and Assessment of Income Distributions," Bulletin of Economic Research, Wiley Blackwell, vol. 44(2), pages 77-124, April.
    5. Haddad, Lawrence & Kanbur, Ravi, 1990. "How Serious Is the Neglect of Intra-Household Inequality?," Economic Journal, Royal Economic Society, vol. 100(402), pages 866-881, September.
    6. Johannes Schwarze, 2003. "Using Panel Data on Income Satisfaction to Estimate Equivalence Scale Elasticity," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 49(3), pages 359-372, September.
    7. Kosei Fukuda, 2013. "A Happiness Study Using Age-Period-Cohort Framework," Journal of Happiness Studies, Springer, vol. 14(1), pages 135-153, March.
    8. Charlier, Erwin, 2002. "Equivalence Scales in an Intertemporal Setting with an Application to the Former West Germany," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(1), pages 99-126, March.
    9. Banks, James & Blundell, Richard & Preston, Ian, 1994. "Life-cycle expenditure allocations and the consumption costs of children," European Economic Review, Elsevier, vol. 38(7), pages 1391-1410, August.
    10. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
    11. Pashardes, Panos, 1991. "Contemporaneous and intertemporal child costs : Equivalent expenditure vs. equivalent income scales," Journal of Public Economics, Elsevier, vol. 45(2), pages 191-213, July.
    12. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
    13. Frick, Joachim R. & Goebel, Jan & Schechtman, Edna & Wagner, Gert G. & Yitzhaki, Shlomo, 2004. "Using Analysis of Gini (ANoGi) for Detecting Whether Two Sub-Samples Represent the Same Universe: The SOEP Experience," IZA Discussion Papers 1049, Institute for the Study of Labor (IZA).
    14. Sara Lelli, 2005. "Using Functionings To Estimate Equivalence Scales," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(2), pages 255-284, June.
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    More about this item


    Equivalence scales; life satisfaction; longitudinal analysis; cohorts¿ well-being;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D60 - Microeconomics - - Welfare Economics - - - General

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