STOCHASTIC EQUIVALENCE SCALES IN LOG-NORMAL DISTRIBUTIONS OF EXPENDITURES
STOCHASTIC EQUIVALENCE SCALES IN LOG-NORMAL DISTRIBUTIONS OF EXPENDITURES

Summary/Abstract: In the paper, the properties of the stochastic equivalence scales (SES) are analysed when expenditure distributions are log-normal. The SES provides the equivalent distribution of expenditures when the population of households is heterogeneous with respect to such attributes as household size, demographic composition, etc. For log-normal expenditure distributions, the non-parametric SES deflators are proportional to the ration of geometric means in compared distributions. The statistical analysis of expenditure distributions for Poland in the years 2005-2010 shows that these deflators perform quite well.

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