Estimating Equivalence Scales Through Engel Curve Analysis

  • Amita Majumder
  • Manisha Chakrabarty
Part of the New Economic Windows book series (NEW)


This paper proposes a simple two-step estimation procedure for Equivalence scales using Engel curve analysis based on a single cross section data on household level consumer expenditure. It uses Quadratic Logarithmic (QL) preferences with the maintained hypothesis of Generalized Equivalence Scale Exactness (GESE) (Donaldson and Pendakur, 2004). The novelty of the proposed procedure is that it neither requires any assumption on the form in which demographic attributes enter into the system of demands, nor any algebraic specification of the underlying cost/utility functions.More importantly, it does not require a computationally heavy estimation of complete demand systems. As an illustrative exercise themethodology is applied to Indian consumer expenditure data.


Equivalence Scale Demographic Group Household Type Demand System Budget Share 
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Copyright information

© Springer-Verlag Italia 2010

Authors and Affiliations

  • Amita Majumder
    • 1
  • Manisha Chakrabarty
    • 2
  1. 1.Economic Research UnitIndian Statistical InstituteKolkataIndia
  2. 2.Indian Institute of ManagementKolkataIndia

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