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Income Dependent Equivalence Scales, Inequality, and Poverty

Author

Listed:
  • Christian Dudel
  • Jan Marvin Garbuszus
  • Notburga Ott
  • Martin Werding
Abstract
Most equivalence scales which are applied in research on poverty and inequality do not depend on income, although there is strong empirical evidence that equivalence scales in fact are income dependent. This paper explores the consistency of results derived from income independent and income dependent scales. It is shown that scales of both types inevitably lead to differing assessments of poverty and inequality under quite general conditions. German microdata will be used to demonstrate and illustrate our findings. Our results provide evidence that income independent scales should be replaced with income dependent equivalence scales.

Suggested Citation

  • Christian Dudel & Jan Marvin Garbuszus & Notburga Ott & Martin Werding, 2015. "Income Dependent Equivalence Scales, Inequality, and Poverty," CESifo Working Paper Series 5568, CESifo.
    • Handle: RePEc:ces:ceswps:_5568
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp5568.pdf
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    References listed on IDEAS

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    Cited by:

    1. Jan Marvin Garbuszus & Notburga Ott & Sebastian Pehle & Martin Werding, 2021. "Income-dependent equivalence scales: A fresh look at German micro-data," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(4), pages 855-873, December.
    2. Notburga Ott, 2018. "Armutsmessung und Armutsbekämpfung: OECD-Skala und „Statistik“-Modell der Regelbedarfsberechnung auf die Probe gestellt [Poverty measurement and poverty reduction: OECD scale and ‚statistical‘-mode," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 12(1), pages 5-25, April.

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    More about this item

    Keywords

    equivalence scales; independence of base; income dependence;
    All these keywords.

    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • D10 - Microeconomics - - Household Behavior - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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