Income surveys are typically designed to collect income data on the household level. In order to obtain reliable outcomes from income distribution and inequality analysis, it is of crucial importance to consider households’ composition and varying needs. Relying on data from Turkey’s 2009-2011 Income and Living Conditions Survey (SILC), this paper examines the GE class inequality indices and Gini coefficient in terms of their sensitivity to choice of equivalence scales. It uses both one-parameter and two-parameter parametric equivalence scales to capture the effects of household size and decomposition. Following Coulter et al. (1992a), this study tests the sensitivity of the inequality indices by calculating a wide range of scale relativities and decomposing the distribution into sub-groups of household sizes.
Topics in Middle Eastern and North African Economies, electronic journal, Volume 17, Middle East Economic Association and Loyola University Chicago, May, 2015, http://www.luc.edu/orgs/meea/
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