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Semiparametric Estimation of Consumption Based Equivalence Scales: The Case of Germany

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  • Wilke, Ralf A.

Abstract

Consumption based equivalence scales are estimated by applying the extended partially linear model (EPLM) to the 1998 Income and Consumption Survey (EVS) carried out in Germany. In this model the equivalence scales are identified by virtue of nonlinearities in household demand. Therefore, the econometric framework should not impose any strong restrictions on the functional forms of household expenditure shares. The chosen semiparametric specification meets this requirement. It is flexible, it yields N-consistent parameter estimates, and is consistent with consumer theory. Estimated equivalence scales are below or in the range of the expert equivalence scales of the German social benefits system.

Suggested Citation

  • Wilke, Ralf A., 2005. "Semiparametric Estimation of Consumption Based Equivalence Scales: The Case of Germany," ZEW Discussion Papers 04-53 [rev.], ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:7179
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    Cited by:

    1. Asencios, Roger, 2018. "Estimación semiparamétrica de escalas de equivalencia: Una aplicación a las encuestas de hogares del Perú," Revista Estudios Económicos, Banco Central de Reserva del Perú, issue 36, pages 75-89.
    2. 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).
    3. Aline Bütikofer, 2012. "Semiparametric Base-Independent Equivalence Scales and the Cost of Children in Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 148(I), pages 1-35, March.
    4. 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.
    5. Wilke, Ralf A., 2003. "Semiparametric Estimation of Regression Functions Under Shape Invariance Restrictions," ZEW Discussion Papers 03-64, ZEW - Leibniz Centre for European Economic Research.
    6. Bernd Fitzenberger & Ralf A. Wilke, 2010. "New Insights into Unemployment Duration and Post Unemployment Earnings in Germany," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(6), pages 794-826, December.
    7. Nicola Fuchs-Schündeln, 2008. "The Response of Household Saving to the Large Shock of German Reunification," Working Papers, Center for Retirement Research at Boston College wp2008-21, Center for Retirement Research, revised Dec 2008.
    8. Leonardo Becchetti & Elena Giachin Ricca & Alessandra Pelloni, 2013. "The Paradox of Children and Life Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 111(3), pages 725-751, May.

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    Keywords

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    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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