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Equivalisation

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Equivalisation is a technique in economics in which members of a household receive different weightings. Total household income is then divided by the sum of the weightings to yield a representative income.

Contents

OECD equivalence scale

Also called the "Oxford scale" and the "old OECD scale". Mentioned by the OECD in the 1980s for possible use in countries without an established scale.

  • 1.0 to the first adult;
  • 0.7 to the second and each subsequent person aged 14 and over;
  • 0.5 to each child aged under 14.

    • OECD-modified scale

    Currently used by Eurostat.

  • 1.0 to the first adult;
  • 0.5 to the second and each subsequent person aged 14 and over;
  • 0.3 to each child aged under 14.

    • Square root scale

    Adopted by more recent OECD publications. The household income is divided by the square root of household size.

    References

    Equivalisation Wikipedia
    (Text) CC BY-SA