Equivalisation

Equivalisation is a technique in economics in which members of a household receive different weightings.[1] Total household income is then divided by the sum of the weightings to yield a representative income.

OECD equivalence scale

This is 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.[2]

  • 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

This is currently used by Eurostat.[2][3]

  • 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

This has been adopted by more recent OECD publications. The household income is divided by the square root of household size.[2]

References
  1. "UK: numbers in low income - The Poverty Site". Poverty.org.uk. Archived from the original on 2010-07-13. Retrieved 2010-07-19.
  2. "WHAT ARE EQUIVALENCE SCALES?". OECD.
  3. http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Glossary:Equivalised_income


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