The Economic Journal
Опубликовано на портале: 20-07-2004James Banks, Paul Johnson The Economic Journal. 1994. Vol. 104. No. 425. P. 883-890.
Recent studies have assessed the impact of choice of equivalence scale on economists' measurement of the equivalent income distribution. One particular study (Coulter, Cowell and Jenkins (1992)) has found that equivalence scales used in the UK official statistics `provide lower estimates of the extent of inequality and poverty than do other scales'. In this paper we demonstrate that these kind of results are dependent on the particular year of data and equivalence scale specification that is used and are not properties intrinsic to particular methodologies. Results are also not robust to the use of more recent UK microeconomic data.
Опубликовано на портале: 20-07-2004Stephen P. Jenkins, Frank A. Cowell The Economic Journal. 1994. Vol. 104. No. 425. P. 891-900.
We respond to Banks and Johnson's (1994) Comment on Coulter et al. (1992) drawing on a more general discussion of parametric equivalence scale and scale relativity issues and new empirical results. We show that criticisms of our earlier work are unfounded. When the McClements scale is properly characterised, the scale does indeed provide lower estimates of poverty and inequality levels than most other scales. We reiterate our conclusion that relationships between scale relativities and inequality and poverty indices may be index-specific. Moreover the picture about distributional trends may differ from that about levels.