This thesis examines three questions concerned with the relative income needs of families of different sizes - often summarised by indices known as ???equivalence scales???. The first is the extent to which researchers and policy makers should offset the costs of family composition (eg the expenditure costs of children) with the benefits associated with demographic choice (eg the ???joys of parenthood???). Chapter 2 concludes that there are demographic and financial market constraints that will often make a narrow focus on expenditure costs appropriate for distributional research and tax/transfer policies. However, this will not always be the case. One implication of this result is that it may be reasonable for distributional research to use different equivalence scales for adults and children in the same household. Part 2 of the thesis introduces a new method for the estimation of the within-household income distribution and expenditure costs of different family types. This is based upon the household welfare model of Samuelson together with Lau???s method for modelling the joint consumption of household goods. In Chapter 4, this method is applied to the estimation of equivalence scales for older singles and married couples. The estimation is based upon a detailed set of assumptions about the extent of joint consumption for 17 different commodity groups. The main conclusions are that: the theoretical model fits the observed behaviour well (with the exception of some home production effects); that aged couples share their income relatively evenly; and that the relative rate of pension for aged singles in Australia is probably too low. In Part 3, the thesis examines how changes in poverty can be estimated when there is uncertainty about the equivalence scale. The thesis proposes a new method which permits a set of upper and lower bounds for the equivalence scale to be assumed, which in turn determine upper and lower bounds for the increase in poverty. This method is applied to measure the change in poverty in Australia during the 1980s. Equivalence scales can be found that imply either an increase or a decrease in poverty.

This thesis examines three questions concerned with the relative income needs of families of different sizes - often summarised by indices known as ???equivalence scales???. The first is the extent to which researchers and policy makers should offset the costs of family composition (eg the expenditure costs of children) with the benefits associated with demographic choice (eg the ???joys of parenthood???). Chapter 2 concludes that there are demographic and financial market constraints that will often make a narrow focus on expenditure costs appropriate for distributional research and tax/transfer policies. However, this will not always be the case. One implication of this result is that it may be reasonable for distributional research to use different equivalence scales for adults and children in the same household. Part 2 of the thesis introduces a new method for the estimation of the within-household income distribution and expenditure costs of different family types. This is based upon the household welfare model of Samuelson together with Lau???s method for modelling the joint consumption of household goods. In Chapter 4, this method is applied to the estimation of equivalence scales for older singles and married couples. The estimation is based upon a detailed set of assumptions about the extent of joint consumption for 17 different commodity groups. The main conclusions are that: the theoretical model fits the observed behaviour well (with the exception of some home production effects); that aged couples share their income relatively evenly; and that the relative rate of pension for aged singles in Australia is probably too low. In Part 3, the thesis examines how changes in poverty can be estimated when there is uncertainty about the equivalence scale. The thesis proposes a new method which permits a set of upper and lower bounds for the equivalence scale to be assumed, which in turn determine upper and lower bounds for the increase in poverty. This method is applied to measure the change in poverty in Australia during the 1980s. Equivalence scales can be found that imply either an increase or a decrease in poverty.

This thesis examines three questions concerned with the relative income needs of families of different sizes - often summarised by indices known as ???equivalence scales???. The first is the extent to which researchers and policy makers should offset the costs of family composition (eg the expenditure costs of children) with the benefits associated with demographic choice (eg the ???joys of parenthood???). Chapter 2 concludes that there are demographic and financial market constraints that will often make a narrow focus on expenditure costs appropriate for distributional research and tax/transfer policies. However, this will not always be the case. One implication of this result is that it may be reasonable for distributional research to use different equivalence scales for adults and children in the same household. Part 2 of the thesis introduces a new method for the estimation of the within-household income distribution and expenditure costs of different family types. This is based upon the household welfare model of Samuelson together with Lau???s method for modelling the joint consumption of household goods. In Chapter 4, this method is applied to the estimation of equivalence scales for older singles and married couples. The estimation is based upon a detailed set of assumptions about the extent of joint consumption for 17 different commodity groups. The main conclusions are that: the theoretical model fits the observed behaviour well (with the exception of some home production effects); that aged couples share their income relatively evenly; and that the relative rate of pension for aged singles in Australia is probably too low. In Part 3, the thesis examines how changes in poverty can be estimated when there is uncertainty about the equivalence scale. The thesis proposes a new method which permits a set of upper and lower bounds for the equivalence scale to be assumed, which in turn determine upper and lower bounds for the increase in poverty. This method is applied to measure the change in poverty in Australia during the 1980s. Equivalence scales can be found that imply either an increase or a decrease in poverty.

This thesis examines three questions concerned with the relative income needs of families of different sizes - often summarised by indices known as ???equivalence scales???. The first is the extent to which researchers and policy makers should offset the costs of family composition (eg the expenditure costs of children) with the benefits associated with demographic choice (eg the ???joys of parenthood???). Chapter 2 concludes that there are demographic and financial market constraints that will often make a narrow focus on expenditure costs appropriate for distributional research and tax/transfer policies. However, this will not always be the case. One implication of this result is that it may be reasonable for distributional research to use different equivalence scales for adults and children in the same household. Part 2 of the thesis introduces a new method for the estimation of the within-household income distribution and expenditure costs of different family types. This is based upon the household welfare model of Samuelson together with Lau???s method for modelling the joint consumption of household goods. In Chapter 4, this method is applied to the estimation of equivalence scales for older singles and married couples. The estimation is based upon a detailed set of assumptions about the extent of joint consumption for 17 different commodity groups. The main conclusions are that: the theoretical model fits the observed behaviour well (with the exception of some home production effects); that aged couples share their income relatively evenly; and that the relative rate of pension for aged singles in Australia is probably too low. In Part 3, the thesis examines how changes in poverty can be estimated when there is uncertainty about the equivalence scale. The thesis proposes a new method which permits a set of upper and lower bounds for the equivalence scale to be assumed, which in turn determine upper and lower bounds for the increase in poverty. This method is applied to measure the change in poverty in Australia during the 1980s. Equivalence scales can be found that imply either an increase or a decrease in poverty.