Subjective poverty equivalence scales for Euro Zone countries
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.
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| Length: | 20 pages |
| Date of creation: | 2011 |
| Handle: | RePEc:inq:inqwps:ecineq2011-233 |
| Contact details of provider: | Web page: http://www.ecineq.org Email: More information through EDIRC
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References listed on IDEAS
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- Federico Perali & Martina Menon, 2009. "Econometric Identification of the Cost of Maintaining a Child," Working Papers 63/2009, University of Verona, Department of Economics.
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- Olken, Benjamin A., 2005. "Revealed community equivalence scales," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 545-566, February.
- Thesia I. Garner & Kathleen Short, 2005. "Personal Assessments of Minimum Income and Expenses: What Do They Tell Us about 'Minimum Living' Thresholds and Equivalence Scales?," Working Papers 379, U.S. Bureau of Labor Statistics.
- Andrea Brandolini, 2006. "Measurement of Income Distribution in Supranational Entities: The Case of the European Union," LIS Working papers 452, LIS Cross-National Data Center in Luxembourg.
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