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Equivalence scales and inequality

Suntory and Toyota International Centres for Economics and Related Disciplines, London School of Economics and Political Science
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  • Hb Economic Theory


At the heart of any distributional analysis there is the problem of allowing for differences in people's non-income characteristics. We examine the role of standard equivalence scales in distributional comparisons and the welfare implications of the basis for constructing equivalence scales. We consider the use of alternative approaches that do not require the specification of a single scale and implement one of these in practical comparison of Spain and the UK.

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