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Appendix B
A range of equivalence scales is applied based on different
technical assumptions about economies of scale in consumption.
Among these scales, the most commonly used are the square root
scale, the (old) OECD scale, and the OECD-modified scale
(Burniaux et al., 1998; Förster, 1994; Hagenaars et al., 1994;
OECD, 2012). Poverty rates are affected by different equivalence
scales. For sensitivity tests, I replicated the analyses using the
OECD-modified scale; the first household member is assigned a
value of 1, of 0.5 to each additional adult and of 0.3 to each child.
The results are shown in Appendix B. In general, the equivalized
income is higher if the economies of scale in consumption are
higher (i.e. the value for elasticity is smaller). For example, in a
five-member family with fixed household income (say, 60,000 NT
dollars per month), families containing more adults (e.g.
households in East Asia) will have lower equivalized income (and
thus, higher poverty rates) than households with fewer adults if
greater weight is given to each additional adult in the household.
Thus, compared to the youth poverty rates shown in Table 2 (i.e.
based on the square root scale), the results here (i.e. based on the
OECD-modified scale) show slightly smaller differences in youth
poverty between Taiwan and Scandinavian countries where
intergenerational coresidence is much less common.
However, the application of different equivalence scales does
not substantially affect the ranking of poverty across countries.
This is also observed in the replicated analyses revealed in Table
Appendix 1. Additional analyses are conducted to examine the
correlation of poverty disparities and the three structural effects
based on the two scales. The Spearman’s rho values are very high
(all pair-wise values are around 0.97,
p
<.001, n=22).
Consistent with the analyses using the square root scale, the
countries with higher levels of youth poverty are Denmark,
Norway, the US, Germany, and Spain while those with lower rates
include Australia, Czech Republic, Japan, Luxembourg, South