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A Restatement of Equivalence Scales Using Time and Monetary Expenditures Combined with Individual Prices

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  • François Gardes

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Christophe Starzec

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

In the classic equivalence scale estimations based on micro-econometric analysis, only the costs of market consumption are taken into account. We define the concept of full cost equivalence scales as integrating both monetary and the time use costs and measure it on matched French family budget and time use surveys. These data allow us to define full prices and to estimate equivalence scales conditional to possible substitution through prices. The results show higher full scales than the monetary for the preferred Independent of a Base specification. Relative to the cost of the second adult, the full child cost is also larger than the monetary for matching estimators and the Prais-Houthakker model. It shows households' capacity to substitute domestic production to market activities. In consequence the measures of income inequality diminish considerably using full income and full equivalence scales.

Suggested Citation

  • François Gardes & Christophe Starzec, 2018. "A Restatement of Equivalence Scales Using Time and Monetary Expenditures Combined with Individual Prices," PSE-Ecole d'économie de Paris (Postprint) hal-01478056, HAL.
    • Handle: RePEc:hal:pseptp:hal-01478056
    DOI: 10.1111/roiw.12302
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    Cited by:

    1. François Gardes, 2021. "On the value of time and human life," Documents de travail du Centre d'Economie de la Sorbonne 21023, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    2. Erica Aloè, 2023. "Time and Income Poverty Measurement. An Ongoing Debate on the Inclusion of Time in Poverty Assessment," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 169(1), pages 283-322, September.
    3. François Gardes, 2021. "On the value of time and human life," Post-Print halshs-03325332, HAL.
    4. Daniel S. Hamermesh & Michał Myck & Monika Oczkowska, 2021. "Widows’ Time, Time Stress and Happiness: Adjusting to Loss," NBER Working Papers 28752, National Bureau of Economic Research, Inc.
    5. Melanie Borah, 2020. "Estimating Extended Income Equivalence Scales from Income Satisfaction and Time Use Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(2), pages 687-718, June.
    6. Melanie Borah & Andreas Knabe & Kevin Pahlke, 2021. "Parental time restrictions and the cost of children: insights from a survey among mothers," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(1), pages 73-95, March.
    7. François Gardes, 2021. "On the value of time and human life," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-03325332, HAL.

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