Subjective equivalence scale – cross-country and time differences

Abstract

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