ARE EQUIVALENCE SCALES THE SAME FOR THE UNITED STATES AND CANADA?

This research uses microdata from the 1986 Statistics Canada Family Expenditure S u ~ e y and from the 1986-88 U.S. Consumer Expenditure Survey to estimate equivalence scales using a methodology which is very similar to that employed by Statistics Canada for the estimation of Low-Income Cutoffs. Employing identical sample selection criteria and identically specified models, we find that equivalence scales for the two countries are not, in general, statistically different when estimated in the same way. The larger issue is then whether the two countries should choose the same methodology for the estimation of equivalence scales.

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