Equivalence scale

An equivalence scale normalizes the economic resources ( income , wealth or consumption expenditure ) of households of different sizes and / or different structures (e.g. different age structures) in wealth or poverty studies .

It therefore reflects both individual differences in needs and the savings made by joint household management (the so-called positive economies of scale ).

An equivalence scale accordingly measures the required percentage increase in household resources when another person joins, on the condition that the household's level of welfare is maintained. An example of an equivalence scale is the OECD scale .

The equivalence relation of an examination household represents the ratio of the household-related equivalence scale value of this examination household to the equivalence scale value of the reference household, usually a one-person household with an equivalence scale value of one.