Estimates of semiparametric equivalence scales

Stengos, Thanasis; Sun, Yiguo; Wang, Dianqin

doi:10.1002/jae.863

Cited by 12 publications

(19 citation statements)

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“…This means that the distributions of equivalent expenditure-that is, x for the nonreference and x υ z for the reference household-must be assumed to overlap if one is to use semiparametric methods to identify equivalence scales. Stengos and Wang (2002) note that  1 will always find minima where υ z is set such that either or both of O f x, z and O f x υ z are close to zero. This is because in this case,  1 gets close to zero no matter how well or poorly the estimated regression curves fit each other.…”

Section: Semiparametric Estimation Given Aesementioning

confidence: 98%

Semiparametric estimation of lifetime equivalence scales

Pendakur

2005

J of Applied Econometrics

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SUMMARY Pashardes (1991) and Banks et al. (1994) use parametric methods to estimate lifetime equivalence scales. Their approaches put parametric restrictions on the differences in within-period expenditure needs across household types, the intertemporal allocation of expenditure, and the shapes of commodity demand equations. This paper puts parametric structure only on the differences in within-period expenditure needs across household types. This implies structure on the intertemporal allocation of expenditure, but leaves the shapes of commodity demand equations unrestricted. Semiparametric methods are used to estimate within-period and lifetime equivalence scales with Canadian expenditure data, and to test the restrictions imposed on withinperiod expenditure functions. Estimated lifetime equivalence scales are similar in size to those estimated by Banks et al. (1994) and exhibit equal lifetime costs for first and second children.

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Section: Semiparametric Estimation Given Aesementioning

confidence: 98%

Semiparametric estimation of lifetime equivalence scales

Pendakur

2005

J of Applied Econometrics

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“…Pendakur, 1999, Stengos et al, 2006) is based on nonparametric estimates of Engel curves. The log equivalence scale is estimated as the horizontal shift of , say, the Engel curve of singles, in order to make it lie on the Engel curve of couples.…”

Section: Nonparametric Analysismentioning

confidence: 99%

The economies of scale of living together and how they are shared: estimates based on a collective household model

Bütikofer

Gerfin

2014

Rev Econ Household

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“…Using the classic approach of Engel (1895) as a starting point, we cover the modern methodological developments in the field. These include extensions of the Linear Expenditure System (Lluch 1973;Howe et al 1979), which have often been applied to German expenditure data; the quadratic extension (QAI) (Banks et al 1997) of the influential Almost Ideal Demand System (AI) (Deaton and Muellbauer 1980a), which is now the standard approach for modeling household demand; semiparametric approaches (Pendakur 1999;Stengos et al 2006); and nonparametric approaches based on the counterfactual framework (Szulc 2009;Dudel 2015). These methods roughly span a continuum in terms of model complexity, data requirements, and the restrictiveness of the underlying assumptions.…”

Section: Introductionmentioning

confidence: 99%

Assessing differences in household needs: a comparison of approaches for the estimation of equivalence scales using German expenditure data

2020

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Equivalence scales are routinely applied to adjust the income of households of different sizes and compositions. Because of their practical importance for the measurement of inequality and poverty, a large number of methods for the estimation of equivalence scales have been proposed. Until now, however, no comprehensive comparison of current methods has been conducted. In this paper, we employ German household expenditure data to estimate equivalence scales using several parametric, semiparametric, and nonparametric approaches. Using a single dataset, we find that some approaches yield more plausible results than others while implausible scales are mostly based on linear Engel curves. The results we consider plausible are close to the modified OECD scale, and to the square root scale for larger households.

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Estimates of semiparametric equivalence scales

Cited by 12 publications

References 19 publications

Semiparametric estimation of lifetime equivalence scales

Semiparametric estimation of lifetime equivalence scales

The economies of scale of living together and how they are shared: estimates based on a collective household model

Assessing differences in household needs: a comparison of approaches for the estimation of equivalence scales using German expenditure data

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