Equivalence versus Indifference Scales

• Autores: Pierre-André Chiappori
• Localización: Economic journal, ISSN 0013-0133, Vol. 126, Nº 592, 2016, págs. 523-545
• Idioma: inglés
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• Resumen

  • Comparing income levels across families with different composition is a central issue for most welfare indicators and policies. Currently, the dominant method relies on income-based equivalence scales, which raise a host of theoretical, empirical and normative difficulties. However, a new approach, based on the notion of indifference scales, avoids most of these problems, while leading to empirically tractable estimation methods. I submit that time has come to abandon the traditional view in favour of the new concept