Discussion Papers no. 296
The Pangloss critique of equivalence scales
Tout est au mieux dans ce meilleur des ménages possibles
A common approach to defining equivalence scales is to consider a household modelled as if it maximizes a single utility function. This may be founded on an assumption of the household maximizing a welfare function of individual utilities. For a positive analysis of the household, this may be appropriate, but it is argued that basing inter-household comparisons of welfare on this approach is generally not valid. The household will generally put different weight on the utility of the various household members, and this weighting does not necessarily correspond to society's aggregation of utility. This complication is called the Pangloss problem. An alternative definition of equivalence scales taking this into account is introduced and discussed.
Om publikasjonen
- Tittel
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Tout est au mieux dans ce meilleur des ménages possibles. The Pangloss critique of equivalence scales
- Ansvarlig
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Jo Thori Lind
- Serie og -nummer
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Discussion Papers no. 296
- Utgiver
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Statistics Norway, Research Department
- Emne
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Discussion Papers
- Antall sider
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20
- Målform
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Engelsk
- Om Discussion Papers
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Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.
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