IDEAS home Printed from https://ideas.repec.org/p/inq/inqwps/ecineq2011-233.html
   My bibliography  Save this paper

Subjective poverty equivalence scales for Euro Zone countries

Author

Listed:
  • Ismael Ahamdanech-Zarco

    (Department of Economics, East Carolina University)

  • John A. Bishop

    (Department of Economics, East Carolina University)

  • Andrew Grodner

    (Department of Economics, East Carolina University)

  • Haiyong Liu

    (Department of Economics, East Carolina University)

Abstract

While the idea behind subjective equivalence scales is generally attractive, subjective scales have been plagued by problems of inconsistency. We address this problem with new European Income and Living Conditions (SILC) datasets that are much larger in size than those available to previous researchers. We estimate subjective equivalence scales for the whole Euro Zone as well as its individual constituent countries. Our subjective scales increase consistently with household size. More importantly, we find that adding the first child is more costly than adding a third adult and that the marginal cost of children declines. Comparing modified OECD scale poverty rates to our subjective poverty rates (holding the overall poverty rate constant) we find that the subjective scales ‘redistribute poverty’ away from larger to smaller households.

Suggested Citation

  • Ismael Ahamdanech-Zarco & John A. Bishop & Andrew Grodner & Haiyong Liu, 2011. "Subjective poverty equivalence scales for Euro Zone countries," Working Papers 233, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2011-233
    as

    Download full text from publisher

    File URL: http://www.ecineq.org/milano/WP/ECINEQ2011-233.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Olken, Benjamin A., 2005. "Revealed community equivalence scales," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 545-566, February.
    2. Van Praag, Bernard, 1971. "The welfare function of income in Belgium: An empirical investigation," European Economic Review, Elsevier, vol. 11(3), pages 337-369.
    3. John A. Bishop & Feijun Luo & Xi Pan, 2006. "Economic Transition And Subjective Poverty In Urban China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(4), pages 625-641, December.
    4. Theo Goedhart & Victor Halberstadt & Arie Kapteyn & Bernard van Praag, 1977. "The Poverty Line: Concept and Measurement," Journal of Human Resources, University of Wisconsin Press, vol. 12(4), pages 503-520.
    5. Federico Perali & Martina Menon, 2009. "Econometric Identification of the Cost of Maintaining a Child," Working Papers 63/2009, University of Verona, Department of Economics.
    6. repec:bla:revinw:v:28:y:1982:i:3:p:345-59 is not listed on IDEAS
    7. Thesia I. Garner & Kathleen Short, 2005. "Personal Assessments of Minimum Income and Expenses: What Do They Tell Us about 'Minimum Living' Thresholds and Equivalence Scales?," Working Papers 379, U.S. Bureau of Labor Statistics.
    8. Klaas de Vos & M. Asghar Zaidi, 1997. "Equivalence Scale Sensitivity Of Poverty Statistics For The Member States Of The European Community," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 43(3), pages 319-333, September.
    9. Andrea Brandolini, 2006. "Measurement of Income Distribution in Supranational Entities: The Case of the European Union," LIS Working papers 452, LIS Cross-National Data Center in Luxembourg.
    10. repec:bla:revinw:v:43:y:1997:i:3:p:319-33 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John Bishop & Andrew Grodner & Haiyong Liu & Ismael Ahamdanech-Zarco, 2014. "Subjective poverty equivalence scales for Euro Zone countries," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(2), pages 265-278, June.
    2. Thesia I. Garner & Kathleen Short, 2005. "Economic Well-Being Based on Income, Consumer Expenditures and Personal Assessments of Minimal Needs," Working Papers 381, U.S. Bureau of Labor Statistics.
    3. Hanjie Wang & Qiran Zhao & Yunli Bai & Linxiu Zhang & Xiaohua Yu, 2020. "Poverty and Subjective Poverty in Rural China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 150(1), pages 219-242, July.
    4. Gustafsson, Björn Anders & Sai, Ding, 2019. "Growing into Relative Income Poverty: Urban China 1988 to 2013," IZA Discussion Papers 12422, Institute of Labor Economics (IZA).
    5. Castro, Damaris & Bleys, Brent, 2023. "Do people think they have enough? A subjective income sufficiency assessment," Ecological Economics, Elsevier, vol. 205(C).
    6. Ferrer-i-Carbonell, Ada & van Praag, Bernard M. S., 2001. "Poverty in the Russian Federation," IZA Discussion Papers 259, Institute of Labor Economics (IZA).
    7. de Ree, Joppe & Alessie, Rob & Pradhan, Menno, 2013. "The price and utility dependence of equivalence scales: Evidence from Indonesia," Journal of Public Economics, Elsevier, vol. 97(C), pages 272-281.
    8. van Praag, Bernard M. S., 1991. "Ordinal and cardinal utility : An integration of the two dimensions of the welfare concept," Journal of Econometrics, Elsevier, vol. 50(1-2), pages 69-89, October.
    9. 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.
    10. Gustafsson, Björn Anders & Yue, Ximing, 2006. "Rural People’s Perception of Poverty in China," IZA Discussion Papers 2486, Institute of Labor Economics (IZA).
    11. Angela Daley & Thesia Garner & Shelley Phipps & Eva Sierminska, 2020. "Differences across countries and time in household expenditure patterns: implications for the estimation of equivalence scales," International Review of Applied Economics, Taylor & Francis Journals, vol. 34(6), pages 734-757, November.
    12. Tamara Gutfleisch & Hans-Jürgen Andreß, 2020. "Perceptions of Society’s Necessary Standard of Living: Are Perceptions Determined by What People Have, or Do They Reflect a Social Consensus?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(2), pages 467-502, June.
    13. Verónica Amarante & Maira Colacce & Federico Scalese, 2024. "Poverty in Latin America: feelings/perceptions Vs. material conditions," Documentos de Trabajo (working papers) 24-01, Instituto de Economía - IECON.
    14. Ravallion, Martin, 2012. "Poor, or just feeling poor ? on using subjective data in measuring poverty," Policy Research Working Paper Series 5968, The World Bank.
    15. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2006. "Income and happiness: Evidence, explanations and economic implications," PSE Working Papers halshs-00590436, HAL.
    16. Ada Ferrer-i-Carbonell, 2013. "Happiness economics," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 4(1), pages 35-60, March.
    17. Melanie Borah & Carina Keldenich & Andreas Knabe, 2019. "Reference Income Effects in the Determination of Equivalence Scales Using Income Satisfaction Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(4), pages 736-770, December.
    18. Zsoka Koczan, 2016. "Being Poor, Feeling Poorer: Inequality, Poverty and Poverty Perceptions in the Western Balkans," IMF Working Papers 2016/031, International Monetary Fund.
    19. Martina Mysíková & Tomáš Želinský & Thesia I. Garner & Kamila Fialová, 2022. "Subjective equivalence scales in Eastern versus Western European countries," Contemporary Economic Policy, Western Economic Association International, vol. 40(4), pages 659-676, October.
    20. Martina Menon & Federico Perali & Eva Sierminska, 2016. "An asset-based indicator of wellbeing for a unified means testing tool: Money metric or counting approach?," Working Papers 421, ECINEQ, Society for the Study of Economic Inequality.

    More about this item

    Keywords

    poverty; equivalence scales; subjective method; eurozone.;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inq:inqwps:ecineq2011-233. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Maria Ana Lugo (email available below). General contact details of provider: https://edirc.repec.org/data/ecineea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.