Costs of children and equivalence scales 

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Appendix A. Detailed equivalence scales 

Table A1. Equivalence scale estimates for Australia published post-1985
Source Methodology Data Number of children
      1 2 3 4
Engle, Iso-prop and Rothbarth
Percival and Harding (2005: Table 2) Iso-prop 1998-99 HES 1.15 1.26 1.35 1.42
Percival and Harding (2000: Table 6) Iso-prop 1993-94 HES 1.16 1.29 1.40  
Tran Nam and Whiteford (1990: Table 3.1) Iso-prop 1984 HES 1.25 1.57 1.97  
Tran Nam & Whiteford (1990: Table 3.1) Engel 1984 HES 1.29 1.66 2.16  
van de Ven (2003: Table 3) Engel 1993-94 HES 1.24 1.50 1.78 2.06
Lee (AIFS 1999: page 62) Engel 1984 HES 1.42 1.65 1.83  
Lancaster and Ray (1998: Table 7) Engel (food excluding takeway food) 1984 & 1988-89 HES 1.22 1.50 1.83  
Lancaster and Ray (1998: Table 7) Engel (all food) 1984 & 1988-89 HES 1.21 1.45 1.75  
Bradbury (1994: Table VII) Rothbarth 1988-89 HES 1.16 1.28 1.35  
Lancaster and Ray (1998: Table 7) Rothbarth (adult clothing) 1984 & 1988-89 HES 1.15 1.32 1.52  
Lancaster and Ray (1998: Table 7) Rothbarth (adult education) 1984 & 1988-89 HES 1.33 1.76 2.33  
van de Ven (2003: Table 3) Rothbarth 1993-94 HES 1.06 1.18 1.32 1.47
Budget standards
Henman (2005) Budget standards, modest but adequate   1.23 1.46 1.61 1.79
Complete demand systems
Lancaster and Ray (1998: Table 7) Barten AIDS 1984 & 1988-89 HES 1.08 1.16 1.24  
Lancaster and Ray (1998: Table 7) Price Scaled AI 1984 & 1988-89 HES 1.21 1.42 1.63  
Lancaster and Ray (1998: Table 7) Price Scaled LES 1984 & 1988-89 HES 1.12 1.24 1.36  
Lancaster and Ray (1998: Table 7) Price Scaled GAID 1984 & 1988-89 HES 1.12 1.23 1.35  
Valenzuela (1999: Table 5) ELES 1993-94 HES 1.18 1.25 1.34  
Tran Nam and Whiteford (1990: Table 5) ELES 1984 HES 1.20 1.27 1.44  
van de Ven (2003: Table 3) Demand system - fixed price effects 1993-94 HES 1.18 1.36 1.54 1.70
van de Ven (2003: Table 3) Demand system - demographic dependent price effects 1993-94 HES 1.12 1.26 1.39 1.52

Notes: Includes studies published post-1985. The reference family type is a childless couple for whom the equivalence scale takes the value 1.00. HES: Household Expenditure Survey.


Table A2. Equivalence scale estimates for Australia, Budget standards method
Source Methodology Data Number of children
1 2 3 4
Henman (2005) Budget standards, low costs standard   1.28 1.57 1.76 1.96
Simplified Henderson
Simplified Henderson – Head working, spouse not working (NATSEM version) Budget standards Based on 1954 New York data 1.22 1.37 1.59 1.74
Simplified Henderson – Head and spouse NILF (NATSEM version) Budget standards Based on 1954 New York data 1.08 1.23 1.45 1.60
Simplified Henderson – Head and spouse working (NATSEM version) Budget standards Based on 1954 New York data 1.40 1.55 1.77 1.92
Lovering (1985) Budget standards 1983 AIFS Survey 1.12 1.28 1.47  

Notes: The reference family type is a childless couple for whom the equivalence scale takes the value 1.00. The estimates of Saunders et al. (1998) are not included since Henman’s figures are an updating and extension of the original SPRC work.


Table A3. Selected international equivalence scales
Source Methodology Data Number of children
1 2 3 4
Citro and Michael (1995) National Academy of Science Expert committee (‘average of other studies’)   1.23 1.45 1.65 1.85
US Department of Agriculture (medium income family) (Lino 2004)   1990-92 CEX (Average income) 1.22 1.36 1.43 1.57
Official US Poverty Threshold (cited in Citro and Michael 1995)     1.20 1.51 1.78 1.99
OECD New     1.20 1.40 1.60 1.80
OECD Old     1.29 1.59 1.88 2.18
Square root of household size     1.22 1.41 1.58 1.73
UK Child support scheme Program rules 2005 1.15 1.20 1.25 1.25

Notes: The reference family type is a childless couple for whom the equivalence scale takes the value 1.00. The US Department of Agriculture estimates are based on the following assumptions about the ages of children. For 1 child assume child is 9-11 years, 2 children: 3-5 years and 9-11 years; 3 children: 3-5 years, 9-11 years and 15-17 years; 4 children: 3-5 years, 9-11 years, 12-14 years and 15-17 years.


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