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Research Paper University of York Discussion Papers in Economics 12/23

Two can live as cheaply as one... but three's a crowd


Publication date

Sep 2012


To measure poverty, incomes must be equivalized across households with different structures. In this paper, we use a very flexible ordered response model to analyze the relationship between income, demographic structure and subjective assessments of financial wellbeing drawn from the 1991-2008 British Household Panel Survey. Our results suggest the existence of large scale economies within marital/cohabiting couples, but substantial diseconomies from the addition of children or further adults. This pattern contrasts sharply with commonly-used equivalence scales, and is consistent with explanations in terms of the capital requirements associated with additions to the core couple.


Related publications

  1. Two can live as cheaply as one... but three's a crowd

    Christopher R. Bollinger, Cheti Nicoletti, and Stephen Pudney


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