Equivalence versus Indifference Scales

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

Econometrics · Economics · Epistemology · Equivalence (formal languages · Mathematical economics · Normative · Positive economics · Pure mathematics · Welfare · Gender, Labor, and Family Dynamics · Income, Poverty, and Inequality · Mathematics · Philosophy · Psychological Well-being and Life Satisfaction

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