Re: st: how to deal with households

[Philipp Rehm <philipp.rehm@gmx.de>]

.
One very common way to adjust for household size is to divide the 
household income by the square root of the number of people living in 
that household.

This might be a helpful site:
http://www.lisproject.org/keyfigures/methods.htm

It says:

Equivalence scale
The equivalent income of an individual is defined as the household 
income of the individual adjusted for differences in household size. 
Unrelated individuals are considered to be 1-person families. Each 
member of a given household has the same equivalent income, regardless 
of age or family relationship.
The square root of the number of persons in the household is used as the 
equivalence scale in all of the figures we report (see reference #1, 
page 21).
#1. Atkinson, A. B., L. Rainwater, and T. M. Smeeding. 1995. Income 
Distribution in OECD Countries: Evidence from the Luxembourg Income 
Study (LIS). Paris: OECD.

HTH,
Philipp

Andrea Bennett wrote:

> Hi,
>
> I wonder if there is a consensus on how one deals with survey data where 
> one individual was asked - besides a lot of other things - about the 
> household income and the number of individuals in that household 
> (including roomers). Now I think I somehow got to adjust income as it 
> obviously depends whether one can use 5000$ for one, two or three 
> people. On the other side I wonder how individuals responded to the 
> household income question when they were just sharing a flat with 
> friends. But, there might be some consensus on that topic? So, is there 
> a good way to adjust household income?
>
> Many thanks for your consideration,
>
> Andrea
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