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Jahrbücher für Nationalökonomie und Statistik

Journal of Economics and Statistics

Editor-in-Chief: Winker, Peter

Ed. by Franz, Wolfgang / Riphahn, Regina / Smolny, Werner / Wagner, Joachim

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Volume 237, Issue 2 (Jun 2017)

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Matching as Non-Parametric Preprocessing for the Estimation of Equivalence Scales

Christian Dudel
  • CESifo Research Network, CESifo GmbH, Munich, Germany; and Department of Social Science, Ruhr-Universität Bochum, Universitätsstr. 150, 44801 Bochum, Germany
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/ Jan Marvin Garbuszus
  • CESifo Research Network, CESifo GmbH, Munich, Germany; and Department of Social Science, Ruhr-Universität Bochum, Universitätsstr. 150, 44801 Bochum, Germany
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  • Other articles by this author:
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/ Notburga Ott
  • CESifo Research Network, CESifo GmbH, Munich, Germany; and Department of Social Science, Ruhr-Universität Bochum, Universitätsstr. 150, 44801 Bochum, Germany
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  • Other articles by this author:
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/ Martin Werding
  • Corresponding author
  • CESifo Research Network, CESifo GmbH, Munich, Germany; and Department of Social Science, Ruhr-Universität Bochum, Universitätsstr. 150, 44801 Bochum, Germany
  • Email
  • Other articles by this author:
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Published Online: 2017-06-02 | DOI: https://doi.org/10.1515/jbnst-2017-0103

Abstract:

Empirically analyzing household behavior usually relies on informal data preprocessing. That is, before an econometric model is estimated, observations are selected in such a way that the resulting subset of data is sufficiently homogeneous to be of interest for the specific research question pursued. In the context of estimating equivalence scales for household income, we use matching techniques and balance checking at this initial stage. This can be interpreted as a non-parametric approach to preprocessing data and as a way to formalize informal procedures. To illustrate this, we use German micro-data on household expenditure to estimate equivalence scales as a specific example. Our results show that matching leads to results which are more stable with respect to model specification and that this type of formal preprocessing is especially useful if one is mainly interested in results for specific subgroups, such as low-income households.

Keywords: equivalence scales; matching; balancing; balance checking; non-parametric preprocessing; household expenditure; household behavior

JEL Classification: C18; D10; D12

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About the article

Received: 2016-08-08

Revised: 2017-02-13

Accepted: 2017-05-09

Published Online: 2017-06-02

Published in Print: 2017-06-27


Citation Information: Jahrbücher für Nationalökonomie und Statistik, ISSN (Online) 2366-049X, ISSN (Print) 0021-4027, DOI: https://doi.org/10.1515/jbnst-2017-0103.

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© 2017 Oldenbourg Wissenschaftsverlag GmbH, Published by De Gruyter Oldenbourg, Berlin/Boston. Copyright Clearance Center

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