Variable Income Equivalence Scales: An Empirical Approach

1.1 A Brief Overview An extensive body of empirical and theoretical literature deals with the measurement of social welfare. This body can be decomposed in several different but related topics, all of which have implications for empirical studies in wel­ fare economics. One of these topics are household equivalence scales which help to compare welfare levels across households that differ in composition. An equivalence scale relates the income of any arbitrary household type to the income of...