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Abstract:

DARP Paper
Equivalence of Scales and Inequality (published in Income Inequality Measurement: From Theory to Practice, J Silber (ed), Dewenter: Kluwer (1999)
Frank A Cowell and Magda Mercader-Prats April 1997
Paper No' DARP 027:
Full Paper (pdf)

Tags: inequality; social welfare; equivalence scales

Instead of Inequality analysis sometimes neglects the problem of allowing differences in people's non-income characteristics in the comparison of income distribution, I would say, At the heart of any distributional analysis there is the problem of allowing for differences in people's non-income characteristics. We examine the role of standard equivalence scales in distributional comparisons and the welfare implications of the basis for constructing equivalence scales. We consider the use of alternative approaches that do not require the specification of a single scale and implement one of these in a practical comparison of Spain and the UK.