Memorandum,
Oslo University, Department of Economics

Abstract: Equivalence scales are defined as the ration between the cost function of households of different size and composition. It is shown that the household cost function depends on the distribution of income or utility within the household. Therefore, neither cost functions nor equivalence scales are uniquely determined by the size and composition of households.

Keywords: INCOME DISTRIBUTION; HOUSEHOLD; COSTS

JEL-codes: D10; D31; D33

6 pages, 1998

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