Measuring the Costs of Living of Australian Families

Abstract

Arguments about the construction and application of equivalence scales have been a constant feature of the income security debate in Australia over the past decade. Ian Manning has written this monograph to provide a review of the attempts to derive equivalence scales from Australian data, and to try to indicate some directions for future work. In his words, An equivalence scale gives an estimate of the relative income required, on average, for households with different characteristics to attain the same standard of living. As such it is a precise estimate of a somewhat hazy concept, and the merits and accuracy of different equivalence scales are therefore necessarily contested. Indeed, some would say that the methodological problems in deriving a widely-accepted equivalence scale are so serious that the concept should be abandoned, but unfortunately it will not go away; the concept is fundamental to the measurement of economic inequality, and it also lies at the basis of the table of social security rates.