Premium
THE ESTIMATION OF PENSIONER EQUIVALENCE SCALES USING SUBJECTIVE DATA
Author(s) -
Stewart Mark B.
Publication year - 2009
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.2009.00352.x
Subject(s) - equivalence (formal languages) , econometrics , economics , scale (ratio) , econometric model , statistics , engel curve , value (mathematics) , estimation , mathematics , geography , price index , cartography , management , discrete mathematics
This paper uses panel data on pensioners' subjective evaluations of their financial positions to construct equivalence scales for pensioners. A pensioner couple is estimated to require an income 44 percent higher than a comparable single pensioner to reach the same standard of living. This is significantly less than the equivalence scale value implied by the ratio of state pension rates, the McClements equivalence scale value, and the scale value derived from Engel curve estimation for food expenditure using the same data source. The estimated equivalence scale value is robust to variations in the definition of the pensioner sample, the measurement of income, and the econometric model used.