On the Income Dependence of Equivalence Scales

Posted: 16 Dec 2004

See all articles by Christos Koulovatianos

Christos Koulovatianos

Department of Finance, University of Luxembourg

Carsten Schröder

Free University of Berlin (FUB) - Department of Business and Economics

Ulrich Schmidt

University of Kiel - Institute of Economics

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Abstract

Household consumption exhibits economies of scale as the number of household members increases. We collect survey data from two countries, Germany and France, in order to obtain direct subjective estimates of household consumption economies of scale, and, in particular, to examine an additional dimension: whether household consumption economies of scale change as living standards go up. Our data from both countries indicate strongly that household economies of scale increase as the living standard goes up. We discuss the robustness of our survey method and compare our results to these of alternative estimation methods in the literature.

Keywords: Equivalence scales, Survey method, Independence of base

JEL Classification: C42, C90, D31, D63, I31

Suggested Citation

Koulovatianos, Christos and Schröder, Carsten and Schmidt, Ulrich, On the Income Dependence of Equivalence Scales. Journal of Public Economics, Vol. 89, No. 5-6, pp. 967-996, June 2005. Available at SSRN: https://ssrn.com/abstract=632043

Christos Koulovatianos (Contact Author)

Department of Finance, University of Luxembourg ( email )

4 Rue Albert Borschette
Luxembourg, L-1246
Luxembourg

Carsten Schröder

Free University of Berlin (FUB) - Department of Business and Economics ( email )

Boltzmannstrasse 20
D-14195 Berlin, 14195
Germany
+49 030 838-52259 (Phone)
+49 030 838-52560 (Fax)

Ulrich Schmidt

University of Kiel - Institute of Economics ( email )

Olshausenstrasse 40
24098 Kiel, 24098
Germany

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