ON THE ESTIMATION OF CONSUMER UNIT SCALES.

Kakwani, Nanak C.

Households of different composition have differing needs, which raises the problem of determining their relative economic positions. The article attempts to estimate consumer unit scales that would allow the comparison of different types of households. The income scale measures the relative income required by families of differing family composition to maintain the same level of satisfaction. Both "income" and "specific" scales may be called consumer unit scales. The incomes of the households, in addition to their expenditures, have been utilized to identify both income and specific scales from the cross-section data. The source of data used is the Australian Survey of Consumer Finances and Expenditures 1967-68. The numerical results on income scale show that, in order to remain on the same level of utility, the required per capita income for a family declines consistently as the family size increases. A one member family, for instance, requires almost 75% higher per capita income than a standard family consisting of head, wife and two children.

CONSUMPTION (Economics); HOUSEHOLDS; CONSUMERS; HOUSEHOLDS & economics; HOME economics; SCALING (Social sciences); ESTIMATION theory; UTILITY theory; INCOME; FAMILY size

Review of Economics & Statistics, 1977, Vol 59, Issue 4, p507

0034-6535

Academic Journal

10.2307/1928717