Household Equivalence Scales and Interpersonal Comparisons.

Recent papers have used household equivalence scales to construct measures of welfare inequality. Th is procedure rests on an often implicit value judgment, namely, that if, after adjustment for demographic characteristics, two households are on the same indifference curve, they are equally well off. That v alue judgment is not compelling, and there are situations in which it is ethically repugnant. This is particularly likely if tastes are fu nctions of past experience and income. Copyright 1987 by The Review of Economic Studies Limited.