The price and utility dependence of equivalence scales: Evidence from Indonesia

Ree, Joppe de; Alessie, Rob; Pradhan, Menno

doi:10.1016/j.jpubeco.2012.09.006

Cited by 26 publications

(10 citation statements)

References 22 publications

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“…This last …nding is consistent with results reported in recent literature that relaxes the assumption of base independence for equivalence scales in context of estimation approaches based on consumption data (e.g. Donaldson and Pendakur, 2003, Koulovatianos et al, 2005, and de Ree et al, 2013.…”

Section: Discussionsupporting

confidence: 92%

Identifying Tax Implicit Equivalence Scales

2014

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Section: Discussionsupporting

confidence: 92%

Identifying Tax Implicit Equivalence Scales

2014

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“…de Ree et al, 2013;Bollinger et al, 2012;Bishop et al, 2014). In other words, the objective scales underestimate economies of scale within the households relative to subjective perception of income situation.…”

Section: Data and Resultsmentioning

confidence: 99%

“…Two recent studies show significant differences between the subjective and the OECD scales (Bollinger et al, 2012;de Ree et al, 2013). The study of Bollinger et al (2012) for England suggests, for example, larger scale economies within couples and substantial diseconomies due to any additional person after considering subjective information on income evaluation.…”

Section: Introductionmentioning

confidence: 99%

Subjective Approach to Assessing Poverty in Poland – Implications for Social Policy

Domitrz

2017

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The poverty rates based on the OECD scales are frequently used in public debate. In this scale, large families are usually identified as those most in need of financial support. Poland is an interesting case for applying an alternative, subjective approach to calculating equivalent scales, as Poland has a large mean size for households, and is dependent on means-testing in social policymaking. The overall poverty rates for the two approaches are not distinctly different but they lead to significantly different distributions of poverty, as different types of households are considered in line with the result in Bishop et al. (2014) for the eurozone countries. The subjective approach suggests that one-person households, not large families, should be considered most at risk of material poverty. Futhermore, the relative positions of households in the income distributions also differ considerably. As a consequence, the current shape of social policy in Poland may need to be reconsidered in order to distribute public transfers more accurately.

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“…An additional criticism of the subjective approach is that by design most empirical studies postulate underlying utility functions that are not consistent with actual consumer behavior (de Ree et al, 2010). The model specification typically employed rules out both price and base utility dependence.…”

Section: Introductionmentioning

confidence: 99%

Subjective poverty equivalence scales for Euro Zone countries

et al. 2013

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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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The price and utility dependence of equivalence scales: Evidence from Indonesia

Cited by 26 publications

References 22 publications

Identifying Tax Implicit Equivalence Scales

Identifying Tax Implicit Equivalence Scales

Subjective Approach to Assessing Poverty in Poland – Implications for Social Policy

Subjective poverty equivalence scales for Euro Zone countries

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