Most equivalence scales which are applied in research on poverty and inequality do not depend on income, although there is strong empirical evidence that equivalence scales in fact are income dependent. This paper explores the consistency of results derived from income independent and income...

This paper examines the measurement of social welfare, poverty and inequality taking into account reference-dependence, loss aversion and diminishing sensitivity - aspects emphasized in Prospect Theory - to social welfare measurement. We suggest a new notion of equivalent income, the income...

We estimate household equivalence scales using income satisfaction data from the German Socio-Economic Panel. We extend previous studies applying this approach by taking reference income into account. This allows separating needs-based from reference effects in the determination of income...

We provide a critique of the standard methodology which bases welfare comparisons between households on deflating household income and consumption by an equivalence scale. We argue that this leads to support for tax/transfer policies that significantly disadvantage low to middle in-come...

We study how measures of socioeconomic health inequality inform about welfare inequality. We argue that transfers of either income or health from a better off to a worse off individual should reduce welfare inequality. Lacking an objective measure of individual welfare, we suggest that such a...

This paper studies the distributional consequences of a systematic variation in expenditure shares and prices. Using European Union Household Budget Surveys and Harmonized Index of Consumer Prices data, we construct household-specific price indices and reveal the existence of a pro-rich...

The conditional equity premium in the model with production is often approximated by assuming a jointly log-normal distribution of the marginal rate of substitution in consumption and the marginal productivity of capital. We show that, for standard parameterization, this premium is about one...