Arbeitspapier
A goodness-of-fit approach to estimating equivalence scales
We use income satisfaction data in order to estimate equivalence scales. Our method differs from previous attempts to use satisfaction data for this purpose in that it can be used to estimate or evaluate any given parametric equivalence scale. It can also be employed to investigate specific questions related to equivalence scales such as whether these scales are income-dependent or to what extent they depend on specific household characteristics such as whether some household members are in a partner relationship. A further advantage of our approach is that, within a first-differencing nonlinear least-squares framework, we can carry out full statistical inference about the hypotheses under consideration. Our empirical results suggest that household economies of scale are higher than those assumed in commonly used scales such as the OECD or the Luxembourg scale. We also obtain the novel empirical result that economies of scale may decrease (rather than increase) in income, which is what one would expect if the share of consumption goods generating economies of scale (such as housing) decreases with income.
- Language
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Englisch
- Bibliographic citation
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Series: IZA Discussion Papers ; No. 7209
- Classification
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Wirtschaft
Wage Level and Structure; Wage Differentials
Labor Discrimination
Mathematical Methods
Personal Income, Wealth, and Their Distributions
- Subject
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income satisfaction
economies of scale
nonlinear least squares
- Event
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Geistige Schöpfung
- (who)
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Biewen, Martin
Juhasz, Andos
- Event
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Veröffentlichung
- (who)
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Institute for the Study of Labor (IZA)
- (where)
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Bonn
- (when)
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2013
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Biewen, Martin
- Juhasz, Andos
- Institute for the Study of Labor (IZA)
Time of origin
- 2013
Other Objects (12)
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Estimating household equivalence scales using subjective survey data
Estimating extended income equivalence scales from income satisfaction and time use data
Taxation, Reranking and Equivalence Scales
Equivalence scales reconsidered an empirical investigation
Utilitarism, Equivalence Scales and Logarithmic Utility
Equivalence scales reconsidered: an empirical investigation
Estimating standard errors and efficient goodness-of-fit tests for regular vine copula models
Estimating standard errors and efficient goodness-of-fit tests for regular vine copula models
Parametric versus Nonparametric Goodness of Fit
Goodness of fit for lattice processes
Data-driven goodness-of-fit tests
Goodness of fit for lattice processes
Estimating household equivalence scales using subjective survey data
Estimating extended income equivalence scales from income satisfaction and time use data
Taxation, Reranking and Equivalence Scales
Equivalence scales reconsidered an empirical investigation
Utilitarism, Equivalence Scales and Logarithmic Utility
Equivalence scales reconsidered: an empirical investigation
Estimating standard errors and efficient goodness-of-fit tests for regular vine copula models
Estimating standard errors and efficient goodness-of-fit tests for regular vine copula models
Parametric versus Nonparametric Goodness of Fit
Goodness of fit for lattice processes
Data-driven goodness-of-fit tests