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Article
Publication date: 7 August 2017

Malgorzata Kalbarczyk-Steclik, Rafal Mista and Leszek Morawski

The purpose of this paper is to calculate the subjective equivalence scale and poverty rates for Poland and compare them to equivalence scales in Eastern and Western Europe.

Abstract

Purpose

The purpose of this paper is to calculate the subjective equivalence scale and poverty rates for Poland and compare them to equivalence scales in Eastern and Western Europe.

Design/methodology/approach

The analysis is based on European Union Statistics on Income and Living Conditions data for 2005-2012. In particular, the authors capture the minimum needs income question and, knowing the minimum needs income of each individual’s observation, apply OLS regression controlling for income and household structure to estimate the poverty threshold, equivalence scales and poverty.

Findings

The subjective equivalence scales for the Euro Zone are constant for the period 2004-2012 and less stable for the CEE countries. The child cost in relation to the cost brought by an additional adult is higher in the CEE countries than in the Euro Zone countries. The subjective poverty rates are lower than the OECD rates. The only exceptions are Latvia, Estonia and Bulgaria.

Originality/value

The authors extend the analysis made by Bishop et al. (2014) by adding data for the years after 2007 and countries outside the Euro Zone.

Details

International Journal of Social Economics, vol. 44 no. 8
Type: Research Article
ISSN: 0306-8293

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Book part
Publication date: 29 May 2009

Carsten Schröder

Equivalence scales are deflators (or “scales”) by which the incomes of different household types can be converted to a comparable, needs-adjusted basis. They are measures…

Abstract

Equivalence scales are deflators (or “scales”) by which the incomes of different household types can be converted to a comparable, needs-adjusted basis. They are measures of intra-household sharing potentials and differences in family members’ needs (i.e., of adults vs. children). One strand of literature uses econometric approaches to derive equivalence scales from household expenditure and time-use data. Another strand uses survey responses of people to quantify equivalence scales directly. Equivalence scales are potentially useful in several areas such as welfare-system design, income taxation, measurement of poverty and inequality, and determining lost earnings damages. This chapter surveys the literature on equivalence scales and presents some applications.

Details

Quantifying Consumer Preferences
Type: Book
ISBN: 978-1-84855-313-2

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Book part
Publication date: 3 April 2003

Thesia I. Garner and Kathleen S. Short

Subjective minimum income (MIQ) and minimum spending (MSQ) are the study focus. Basic Needs Module (1995) data from the U.S. Survey of Income and Program Participation are…

Abstract

Subjective minimum income (MIQ) and minimum spending (MSQ) are the study focus. Basic Needs Module (1995) data from the U.S. Survey of Income and Program Participation are analyzed. A regression intersection approach is used to estimate household thresholds. MIQ thresholds are higher than MSQ thresholds. Both are higher than U.S. official poverty thresholds, and thresholds based on a National Academy of Sciences (NAS) methodology. Subjective threshold-based equivalence scales imply greater economies of scale than those in the other two measures but are similar to behavioral scales. This finding suggests that families make trade-offs to meet their minimum needs.

Details

Inequality, Welfare and Poverty: Theory and Measurement
Type: Book
ISBN: 978-0-76231-014-2

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Book part
Publication date: 15 December 2004

Thesia I. Garner and Kathleen S. Short

Responses to minimum income and minimum spending questions are used to produce economic well-being thresholds. Thresholds are estimated using a regression framework…

Abstract

Responses to minimum income and minimum spending questions are used to produce economic well-being thresholds. Thresholds are estimated using a regression framework. Regression coefficients are based on U.S. Survey of Income and Program Participation (SIPP) data and then applied to U.S. Consumer Expenditure Survey (CE) data. Three different resource measures are compared to the estimated thresholds. The first resource measure is total before-tax money income, and the other two are expenditure based. The first of these two refers to expenditure outlays and the second to outlays adjusted for the value of the service flow of owner-occupied housing (rental equivalence). The income comparison is based on SIPP data while the outlays comparisons are based on CE data. Results using official poverty thresholds are shown for comparison. This is among the earliest work in the U.S. in which expenditure outlays have been used for economic well-being determinations in combination with personal assessments, and the first time rental equivalence has been used in such an exercise. Comparisons of expenditures for various bundles of commodities are compared to the CE derived thresholds to provide insight concerning what might be considered minimum or basic.

Results reveal that CE and SIPP MIQ thresholds are higher than MSQ thresholds, and resulting poverty rates are also higher with the MIQ. CE-based MSQ thresholds are not statistically different from average expenditure outlays for food, apparel, and shelter and utilities for primary residences. When reported rental equivalences for primary residences that are owner occupied are substituted for out-of-pocket shelter expenditures, single elderly are less likely to be as badly off as they would be with a strict outlays approach in defining resources.

Details

Studies on Economic Well-Being: Essays in the Honor of John P. Formby
Type: Book
ISBN: 978-0-76231-136-1

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Book part
Publication date: 21 October 2019

Antonella Zucchella and Serena Malvestito

This contribution discusses how multinational firms could serve poorer consumers in developed regions like Europe and through which business models, beyond the traditional…

Abstract

This contribution discusses how multinational firms could serve poorer consumers in developed regions like Europe and through which business models, beyond the traditional corporate social responsibility (CSR) actions. MNEs have still limited capacity to address poverty in developed countries, notwithstanding some experience they have matured in developing markets and the striking figures of rising poverty in Europe and the United States. This research focuses on a specific issue: the role of MNEs in addressing poverty in developed markets, either leveraging on their previous expertise gained in developing countries or designing novel ad hoc solutions. The capacity of Western multinationals to tackle effectively the challenge of profitably doing business at the base of the pyramid (BoP) represents a controversial issue in literature and an intriguing topic for international business studies. The empirical research is based on three case studies. The companies have already gained experience in targeting BoP markets in developing countries. They are analyzed in order to understand better their approaches and their applicability in Europe.

Details

International Business in a VUCA World: The Changing Role of States and Firms
Type: Book
ISBN: 978-1-83867-256-0

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Book part
Publication date: 28 December 2018

Abstract

Details

Inequality, Taxation and Intergenerational Transmission
Type: Book
ISBN: 978-1-78756-458-9

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Article
Publication date: 1 July 2003

Bruce Bradbury

Conventional consumer equivalence scales measure the cost of children (and other household living arrangements) but not their benefits. Since many people choose to have…

Abstract

Conventional consumer equivalence scales measure the cost of children (and other household living arrangements) but not their benefits. Since many people choose to have children, these costs must be outweighed by other benefits. This paper considers these issues of demographic choice and explores the relevance of consumer equivalence scales to the broader welfare questions associated with tax/transfer policies and poverty and inequality measurement. The paper concludes that in contrast to conventional methods of measuring poverty and inequality, there is a case for the use of different equivalence scales for adults and children in the same household. Though the adults may have chosen their lower living standard in exchange for the “joys of parenthood”, the children have made no such choice.

Details

International Journal of Social Economics, vol. 30 no. 7
Type: Research Article
ISSN: 0306-8293

Keywords

Content available
Article
Publication date: 17 March 2021

Kamila Fialová and Martina Mysíková

The authors aim to demonstrate the impact of allowing for unequal intra-household distribution of resources on income poverty and income inequality.

Abstract

Purpose

The authors aim to demonstrate the impact of allowing for unequal intra-household distribution of resources on income poverty and income inequality.

Design/methodology/approach

The paper applies a collective consumption model to study the intra-household distribution of resources in Visegrád countries (V4). It utilises subjective financial satisfaction as a proxy for indirect utility from individual consumption to estimate the indifference scales within couples instead of the traditional equivalence scale. The European Union Statistics on Income and Living Conditions (EU-SILC) 2013 and 2018 data are applied.

Findings

This study’s results indicate substantial economies of scale from living in a couple that are generally higher than implied by the commonly applied equivalence scale. The sharing rule estimates suggest that at the mean of distribution factors, women receive a consumption share between 0.4 and 0.6; however, some of the results are close to an equal sharing of 0.5. The female consumption share rises with her contribution to household income. Regarding income poverty and inequality, the authors show that both these measures might be underestimated in the traditional approach to equal sharing of resources.

Originality/value

The authors add to the empirics by estimating indifference scales for Czechia (CZ), Hungary (HU), Poland (PL) and Slovakia (SK), countries that have not been involved in previous research.

Details

International Journal of Social Economics, vol. 48 no. 6
Type: Research Article
ISSN: 0306-8293

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Book part
Publication date: 16 July 2019

Enrique Carreras-Romero, Ana Carreras-Franco and Ángel Alloza-Losada

Economic globalization is leading large companies to focus on international strategic management. Nowadays, the assets referred to as “corporate intangibles,” such as…

Abstract

Economic globalization is leading large companies to focus on international strategic management. Nowadays, the assets referred to as “corporate intangibles,” such as corporate reputation, are becoming increasingly important because they are considered a key factor for the viability of an organization, and companies therefore need to incorporate them into their scorecards for management. The problem is that their measurement is subjective and latent. These two characteristics impede direct international comparison and require demonstrating the accuracy of comparison via a minimum of two tests – construct equivalence and metric equivalence. As regards corporate reputation, construct equivalence was verified by Naomi Gardberg (2006). However, the subsequent studies did not address metric equivalence. Based on the results of a survey provided by the Reputation Institute (n = 5,950, 50 firms evaluated in 17 countries in the Americas, Europe, Asia and Australia), the degree of RepTrak metric equivalence has been tested, using two different methodologies, multigroup analysis (structural equation model), and a new technique from 2016, the Measurement Invariance of Composite Model procedure from the Partial Least Square Path Modeling family. As one would expect from other cross-cultural studies, reputation metrics do not meet the full metric equivalence, which is why they require standardization processes to ensure international comparability. Both methodologies have identified the same correction parameters, which have allowed validation of the mean and variance of response style by country.

Details

Global Aspects of Reputation and Strategic Management
Type: Book
ISBN: 978-1-78754-314-0

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Book part
Publication date: 23 August 2012

Jürgen Faik

This paper examines the impact on German personal income distribution of income-dependent (variable) equivalence scales. The use of variable equivalence scales causes…

Abstract

This paper examines the impact on German personal income distribution of income-dependent (variable) equivalence scales. The use of variable equivalence scales causes distinctive increases in income inequality compared with income-independent, constant equivalence scales. The narrowing of income limits between the upper and lower income regions also leads to an increase in income inequality.

Details

Inequality, Mobility and Segregation: Essays in Honor of Jacques Silber
Type: Book
ISBN: 978-1-78190-171-7

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