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Subjective poverty equivalence scales for Euro Zone countries

Author

Listed:
  • Ismael Ahamdanech-Zarco

    (Department of Economics, East Carolina University)

  • John A. Bishop

    (Department of Economics, East Carolina University)

  • Andrew Grodner

    (Department of Economics, East Carolina University)

  • Haiyong Liu

    (Department of Economics, East Carolina University)

Abstract

While the idea behind subjective equivalence scales is generally attractive, subjective scales have been plagued by problems of inconsistency. We address this problem with new European Income and Living Conditions (SILC) datasets that are much larger in size than those available to previous researchers. We estimate subjective equivalence scales for the whole Euro Zone as well as its individual constituent countries. Our subjective scales increase consistently with household size. More importantly, we find that adding the first child is more costly than adding a third adult and that the marginal cost of children declines. Comparing modified OECD scale poverty rates to our subjective poverty rates (holding the overall poverty rate constant) we find that the subjective scales ‘redistribute poverty’ away from larger to smaller households.

Suggested Citation

  • Ismael Ahamdanech-Zarco & John A. Bishop & Andrew Grodner & Haiyong Liu, 2011. "Subjective poverty equivalence scales for Euro Zone countries," Working Papers 233, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2011-233
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2011-233.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    poverty; equivalence scales; subjective method; eurozone.;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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