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Abstract

In this paper we describe a simple method to estimate household cost functions and family equivalence scales. It is an alternative to standard methods as it does not assume strong postulates about utility maximization nor any functionally specified model equations. The data requirements are extremely modest. We assume interpersonal ordinal comparability in the sense of Sen (1976). Empirical evidence for eight European countries and the U.S.A. shows the feasibility of the method and the stability of its results.

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