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Subjective Equivalence Scales Using EU-SILC Panel Data for Poland, the Czech Republic and Hungary

Author

Listed:
  • Leszek Morawski

    (Vistula University and Institute of Economics, the Polish Academy of Sciences)

  • Małgorzata Kalbarczyk-Stęclik

    (Faculty of Economic Sciences, University of Warsaw)

  • Rafał Miśta

    (Robert B. Zajonc Institute for Social Studies, University of Warsaw)

Abstract

Equivalence scales are commonly employed in income analysis to compare the wealth of households of various compositions (e.g., 0-child, 1-child). The choice of weights for this type of analysis is not self-evident. In this paper, subjective equivalence scales for households in Poland, the Czech Republic, and Hungary are estimated. We use longitudinal EU-SILC data for 2005–2012 following the approach of Goedhart et al. (1977) as employed by Bishop et al. (2014). The use of longitudinal data shows that previous results on the subjective minimum income that were based on the OLS estimates for cross-section data overestimated the impact from current income and underestimated the role of economies of scale. Subjective equivalence scales imply a decreasing marginal cost of children in the three countries, which makes them distinct from the OECD scale. The marginal cost of a first child is similar to the values assumed in the OECD scale, but the cost of a second child is much lower.

Suggested Citation

  • Leszek Morawski & Małgorzata Kalbarczyk-Stęclik & Rafał Miśta, 2017. "Subjective Equivalence Scales Using EU-SILC Panel Data for Poland, the Czech Republic and Hungary," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 67(4), pages 585-604, December.
    • Handle: RePEc:aka:aoecon:v:67:y:2017:i:4:p:585-604
    Note: This work was supported by the Polish National Science Centre (NCN) under Grant No. DEC-2013/09/B/HS4/01923.
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    More about this item

    Keywords

    subjective equivalence scales; minimum income; EU-SILC; panel data; Poland; Czech Republic; Hungary;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • P46 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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