Sensitivity Analysis of Equivalency Scale in Income Inequality Studies

Abstract:     
Family size equivalency scale is widely used in income inequality studies to deal with the differences in the size of each household, and it is widely accepted that the use of different scales significantly alters the estimated values of the inequality indexes and produces U-shaped pattern. This study will demonstrate that, although the variety of equivalency scale produces different estimates of income inequality indexes, such estimated values are not statistically significantly different from each other.

Number of Pages in PDF File: 27

Keywords: Income Inequality, Equivalency Scale, McClements Scale

JEL Classification: D33, E25, H55, I32, J30, N35

working papers series