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On the income dependence of equivalence scales
Journal of Public Economics
Household consumption exhibits economies of scale as the number of household members increases. We collect survey data from two countries, Germany and France, in order to obtain direct subjective estimates of household consumption economies of scale, and, in particular, to examine an additional dimension: whether household consumption economies of scale change as living standards go up. Our data from both countries indicate strongly that household economies of scale increase as the living standard goes up. We discuss the robustness of our survey method and compare our results to these of alternative estimation methods in the literature.
Authors' draft. Working paper dated August 14, 2004. Final version available online at http://www.sciencedirect.com/
Journal of Public Economics, Vol. 89(5-6), June 2005, pp. 967-996