Equivalence scales for Poland – new evidence using complete demand systems approach
Equivalence scales for Poland – new evidence using complete demand systems approach

Summary/Abstract: The concept of equivalence scales is considered as a measure of the welfare of different demographic types of household. The paper presents results of the estimation of equivalence scales using a complete demand system (CDS) approach. Within this approach, ESE/IB and GESE assumptions are considered. For empirical parametric specifications of CDS rank three quadratic almost ideal demand systems (QUAIDS) models are employed. The data used to estimate the QUAIDS is based on a pooled cross section of the 2005–2009 Household Expenditure Survey. The results of estimation for employees’ households obtained from model with ESE/IB restrictions lead to equivalence scales similar to those of widely used “modified OECD” scales. It is also found that the equivalence scales decreased as the household’s expenditures increased.

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