Abstract
Most equivalence scales that are applied in research on inequality do not depend on income, even though there is strong empirical evidence that equivalence scales are actually income-dependent. This paper explores the consistency of results derived from income-independent and income-dependent scales. We show that applying income-independent scales when income-dependent scales would be appropriate leads to violations of the transfer principle. Surprisingly, there are some exceptions, but these require unrealistic and strong assumptions. Thus, the use of income-dependent equivalence scales almost always leads to different assessments of inequality than the use of income-independent equivalence scales. Two examples illustrate our findings.
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Articles in the same Issue
- Frontmatter
- Original Articles
- Skimming through search
- Do political parties matter? Evidence from German municipalities
- In-group, out-group effects in distributional preferences: the case of gender
- Patents versus rewards: the implications of production inefficiency
- Income-(in)dependent equivalence scales and inequality measurement
Articles in the same Issue
- Frontmatter
- Original Articles
- Skimming through search
- Do political parties matter? Evidence from German municipalities
- In-group, out-group effects in distributional preferences: the case of gender
- Patents versus rewards: the implications of production inefficiency
- Income-(in)dependent equivalence scales and inequality measurement