Equivalence scales and the change in poverty levels across time: Turkish case. Issue 1 (2nd January 2020) - Erus, Burcay
ABSTRACT: Equivalence scales are used to adjust household income for household size and composition differences. The literature on poverty calculations have found sensitivity of poverty measurements to the choice of equivalence scales. In this study, we aim to estimate the sensitivity of the Turkish poverty rate and its change over time to the choice of equivalence scales. To that end, Household Budget Survey micro-level data are used and poverty rates are calculated for different equivalence scales. Results show that poverty rates differ sharply with the scale parameter. The change in poverty over time varies in absolute terms with most scale parameter values but only for high values of scale as a ratio of the initial period. Characteristics of poor households also change with scale alternatives.