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Does going beyond income make a difference? Income vs. equivalent income in the EU over 2007-2011
Marko Ledić* 
Article | Year: 2020 | Pages: 423 - 462 | Volume: 44 | Issue: 4 Received: March 20, 2020 | Accepted: June 30, 2020 | Published online: December 1, 2020
|
FULL ARTICLE
FIGURES & DATA
REFERENCES
CROSSMARK POLICY
METRICS
LICENCING
PDF
|
|
2007
|
2011
|
Difference
|
2007 and 2011 pooled
|
|
|
Est.
|
SE
|
Est.
|
SE
|
Diff.
|
p-value
|
Est.
|
SE
|
|
lnY (β)
|
0.358
|
[0.031]***
|
0.296
|
[0.025]***
|
-0.062
|
0.124
|
0.324
|
[0.020]***
|
|
UNE (γ1)
|
-0.661
|
[0.084]***
|
-0.690
|
[0.056]***
|
-0.029
|
0.773
|
-0.678
|
[0.047]***
|
|
HEAvbad
(γ2)
|
-2.264
|
[0.150]***
|
-2.313
|
[0.111]***
|
-0.049
|
1.000
|
-2.285
|
[0.089]***
|
|
HEAbad
(γ3)
|
-1.645
|
[0.071]***
|
-1.614
|
[0.060]***
|
0.031
|
1.000
|
-1.622
|
[0.046]***
|
|
HEAfair
(γ4)
|
-0.896
|
[0.050]***
|
-0.849
|
[0.042]***
|
0.047
|
0.474
|
-0.865
|
[0.032]***
|
|
HEAgood
(γ5)
|
-0.457
|
[0.042]***
|
-0.443
|
[0.035]***
|
0.014
|
0.803
|
-0.446
|
[0.027]***
|
|
HOUspace
(γ6)
|
-0.251
|
[0.042]***
|
-0.299
|
[0.036]***
|
-0.048
|
0.382
|
-0.282
|
[0.027]***
|
|
HOUrot
(γ7)
|
-0.330
|
[0.052]***
|
-0.317
|
[0.048]***
|
0.013
|
0.844
|
-0.317
|
[0.035]***
|
|
HOUdamp
(γ8)
|
-0.245
|
[0.048]***
|
-0.181
|
[0.042]***
|
0.064
|
0.318
|
-0.205
|
[0.032]***
|
|
HOUbathtoil
(γ9)
|
-0.219
|
[0.067]**
|
-0.054
|
[0.064]
|
0.165
|
0.076
|
-0.143
|
[0.046]**
|
|
CRImoder
(γ10)
|
-0.126
|
[0.034]***
|
-0.131
|
[0.029]***
|
-0.005
|
0.924
|
-0.125
|
[0.022]***
|
|
CRImajor
(γ11)
|
-0.202
|
[0.053]***
|
-0.232
|
[0.063]***
|
-0.030
|
0.721
|
-0.202
|
[0.039]***
|
|
ENVwater
(γ12)
|
-0.160
|
[0.037]***
|
-0.147
|
[0.035]***
|
0.013
|
0.803
|
-0.153
|
[0.025]***
|
|
ENVair
(γ13)
|
-0.087
|
[0.034]*
|
-0.116
|
[0.032]***
|
-0.029
|
0.534
|
-0.097
|
[0.023]***
|
|
male (π1)
|
-0.123
|
[0.030]***
|
-0.067
|
[0.025]**
|
0.056
|
0.151
|
-0.087
|
[0.019]***
|
|
age (π2)
|
-0.059
|
[0.006]***
|
-0.053
|
[0.005]***
|
0.006
|
0.415
|
-0.056
|
[0.004]***
|
|
age2
(π3)
|
0.641
|
[0.057]***
|
0.584
|
[0.045]***
|
-0.057
|
0.432
|
0.616
|
[0.035]***
|
|
edulow
(π4)
|
-0.212
|
[0.056]***
|
0.015
|
[0.051]
|
0.227
|
0.003
|
-0.094
|
[0.038]*
|
|
eduhigh
(π5)
|
0.020
|
[0.037]
|
0.015
|
[0.029]
|
-0.005
|
0.921
|
0.020
|
[0.023]
|
|
marrcoh
(π6)
|
0.353
|
[0.057]***
|
0.277
|
[0.043]***
|
-0.076
|
0.286
|
0.295
|
[0.034]***
|
|
divsep
(π7)
|
-0.309
|
[0.071]***
|
-0.231
|
[0.054]***
|
0.078
|
0.380
|
-0.263
|
[0.043]***
|
|
widow (π8)
|
-0.173
|
[0.077]*
|
-0.170
|
[0.059]**
|
0.003
|
0.975
|
-0.182
|
[0.047]***
|
|
urban (π9)
|
-0.048
|
[0.037]
|
-0.050
|
[0.030]+
|
-0.002
|
0.963
|
-0.062
|
[0.023]**
|
|
child (π10)
|
0.144
|
[0.048]**
|
0.146
|
[0.037]***
|
0.002
|
0.970
|
0.158
|
[0.029]***
|
|
trust (π11)
|
0.286
|
[0.011]***
|
0.222
|
[0.009]***
|
-0.064
|
0.000
|
0.247
|
[0.007]***
|
|
year2011
(π12)
|
|
|
|
|
|
|
0.110
|
[0.020]***
|
|
pseudo
R2
|
0.106
|
|
0.077
|
|
|
|
0.087
|
|
|
log
likelih.
|
-34,000
|
|
-47,000
|
|
|
|
-82,000
|
|
|
chi-2
|
5,783
|
|
5,983
|
|
|
|
11,000
|
|
|
N
|
18,899
|
|
25,117
|
|
|
|
44,016
|
|
childless, surveyed in 2011, from Austria, non-unemployed, with all non-income dimensions at the best levels. Weights are used in all estimations.
Note: Example of interpretation: 0.1 above the bar labelled HEAvbad, means that is a person is in very bad, rather than very good, health (i.e., if HEAvbad = 1) and has all the other nonincome dimensions at their reference (best) levels, her equivalent income is 0.1 percent of her income. The figure is calculated as: 100exp(φ2). Other figures can be calculated and interpreted in the same way.
Note: The first (second) number in parentheses next to a country label is the country’s rank by the average income (equivalent income) or, on the bottom panel, by the respective growth rates.
Note: The first (second) number in parentheses next to a country label is the country’s rank by the Atkinson index for income (equivalent income) or, on the bottom panel, by the respective growth rates.
 Note: Decomposition is based on equation (9). Y, UNE, HEA, HOU, CRI and ENV refer to the contributions of income, unemployment, health, housing, crime and environment, respectively.
|
|
Percent of variance due to
variation in
|
|
|
ln μ
|
ln(1-A1)
|
Δln μ
|
Δln(1-A1)
|
ln μ*
|
ln(1-A1*)
|
Δln μ*
|
Δln(1-A1*)
|
|
Variance
of:
|
|
lnW (2007)
|
94.5
|
5.5
|
-
|
-
|
-
|
-
|
-
|
-
|
|
lnW (2011)
|
93.5
|
6.5
|
-
|
-
|
-
|
-
|
-
|
-
|
|
ΔlnW
|
-
|
-
|
83.8
|
16.2
|
-
|
-
|
-
|
-
|
|
lnW* (2007)
|
-
|
-
|
-
|
-
|
75.6
|
24.4
|
-
|
-
|
|
lnW* (2011)
|
-
|
-
|
-
|
-
|
71.2
|
28.8
|
-
|
-
|
|
ΔlnW*
|
|
|
|
|
|
|
81.2
|
18.8
|
|
Contribution to var(lnW*)=100 or var(ΔlnW*)=100 of variation in:
|
2007
|
2011
|
Change
2007-2011
|
|
1. C(W)
or C(ΔW)
|
39.3
|
45.2
|
12.7
|
|
1a. C(μ) or C(Δμ)
|
36.7
|
42.3
|
10.3
|
|
1b. C(A1) or C(ΔA1)
|
2.6
|
2.9
|
2.4
|
|
2. C(nonY)
or C(ΔnonY)
|
60.7
|
54.8
|
87.3
|
|
2a. C(UNE) or C(ΔUNE)
|
1.6
|
3.9
|
2.2
|
|
2b. C(HEA) or C(ΔHEA)
|
31.4
|
31.1
|
41.7
|
|
2c. C(HOU) or C(ΔHOU)
|
14.7
|
12.9
|
9.7
|
|
2d. C(CRI) or C(ΔCRI)
|
3.8
|
0.8
|
13.5
|
|
2e. C(ENV) or C(ΔENV)
|
9.2
|
6.1
|
20.2
|
Note: Decomposition based on the version of equation (12) representing changes over 2007-2011 (see text).
|
Countries
|
Year
|
|
2007
|
2011
|
|
N
|
%
of total N
|
N
|
%
of total N
|
|
AT
|
534
|
2.8
|
729
|
2.9
|
|
BE
|
713
|
3.8
|
734
|
2.9
|
|
BG
|
586
|
3.1
|
691
|
2.8
|
|
CY
|
683
|
3.6
|
586
|
2.3
|
|
CZ
|
749
|
4.0
|
708
|
2.8
|
|
DE
|
1,364
|
7.2
|
2,312
|
9.2
|
|
DK
|
772
|
4.1
|
841
|
3.3
|
|
EE
|
740
|
3.9
|
702
|
2.8
|
|
EL
|
702
|
3.7
|
658
|
2.6
|
|
ES
|
451
|
2.4
|
901
|
3.6
|
|
FI
|
774
|
4.1
|
852
|
3.4
|
|
FR
|
1,126
|
6.0
|
1,889
|
7.5
|
|
HU
|
686
|
3.6
|
690
|
2.7
|
|
IE
|
403
|
2.1
|
807
|
3.2
|
|
IT
|
484
|
2.6
|
1,407
|
5.6
|
|
LT
|
749
|
4.0
|
897
|
3.6
|
|
LU
|
484
|
2.6
|
650
|
2.6
|
|
LV
|
591
|
3.1
|
756
|
3.0
|
|
MT
|
528
|
2.8
|
474
|
1.9
|
|
NL
|
771
|
4.1
|
811
|
3.2
|
|
PL
|
936
|
5.0
|
1,632
|
6.5
|
|
PT
|
376
|
2.0
|
544
|
2.2
|
|
RO
|
638
|
3.4
|
1,148
|
4.6
|
|
SE
|
900
|
4.8
|
820
|
3.3
|
|
SI
|
650
|
3.4
|
623
|
2.5
|
|
SK
|
731
|
3.9
|
656
|
2.6
|
|
UK
|
778
|
4.1
|
1,599
|
6.4
|
|
18,899
|
100.0
|
25,117
|
100,0
|
|
Variable name
in life
satisfaction model
|
Description
|
Reference (best) category for non-income dimensions
|
2007
|
2011
|
|
Mean
|
SD
|
Mean
|
SD
|
|
S
|
life
satisfaction; integer scale from 1 (very dissatisfied) to 10 (very satisfied)
|
-
|
7.06
|
2.08
|
7.05
|
2.12
|
|
lnY
|
logarithm
of household disposable income equivalized by the OECD equivalence scale
|
-
|
9.99
|
0.71
|
9.81
|
0.71
|
|
UNE
|
1 if
unemployed; 0 otherwise
|
“non-unemployed”:
(self)employed, retired, students, other inactive
|
0.05
|
0.22
|
0.08
|
0.27
|
|
HEAvbad
|
1 if
self-assessed health (SAH) very bad; 0 otherwise
|
SAH
very good
|
0.02
|
0.13
|
0.02
|
0.15
|
|
HEAbad
|
1 if SAH
bad; 0 otherwise
|
SAH
very good
|
0.08
|
0.27
|
0.08
|
0.27
|
|
HEAfair
|
1 if SAH
fair; 0 otherwise
|
SAH
very good
|
0.27
|
0.44
|
0.28
|
0.45
|
|
HEAgood
|
1 if SAH
good; 0 otherwise
|
SAH
very good
|
0.41
|
0.49
|
0.4
|
0.49
|
|
HOUspace
|
1 if
there is shortage of space; 0 otherwise
|
there
is no shortage of space in dwelling
|
0.19
|
0.39
|
0.16
|
0.37
|
|
HOUrotten
|
1 if
dwelling has rotten parts; 0 otherwise
|
there
are no rotten parts in dwelling
|
0.13
|
0.33
|
0.10
|
0.30
|
|
HOUdamp
|
1 if
there are damps or leaks in dwelling; 0 otherwise
|
there
are no damps or leaks in dwelling
|
0.15
|
0.35
|
0.14
|
0.35
|
|
HOUbathtoil
|
1 if
there is no bath or toilet in dwelling; 0 otherwise
|
there
are both bath and toilet in dwelling
|
0.07
|
0.25
|
0.06
|
0.23
|
|
CRImoder
|
1 if
moderate problems with crime or vandalism in the neighbourhood
|
no
problems with crime or vandalism in neighbourhood
|
0.33
|
0.47
|
0.26
|
0.44
|
|
CRImajor
|
1 if
major problems with crime or vandalism in neighbourhood.
|
no
problems with crime or vandalism in neighbourhood
|
0.14
|
0.34
|
0.06
|
0.23
|
|
ENVwat
|
1 if any
problems with drinking water in neighbourhood
|
no
problems with drinking water in neighbourhood
|
0.36
|
0.48
|
0.22
|
0.41
|
|
ENVair
|
1 if
any problems with air in neighbourhood
|
no
problems with air in neighbourhood
|
0.44
|
0.50
|
0.26
|
0.44
|
|
male
|
1 if
male; 0 if female
|
-
|
0.49
|
0.50
|
0.49
|
0.50
|
|
age
|
age in
years
|
-
|
46.96
|
17.27
|
48.21
|
17.78
|
|
edulow
|
1 if
low education (primary or less); 0 otherwise; reference: intermediate educ.
(secondary)
|
-
|
0.10
|
0.31
|
0.10
|
0.30
|
|
eduhigh
|
1 if
high education (tertiary); 0 otherwise; reference: intermediate educ.
(secondary)
|
-
|
0.21
|
0.41
|
0.25
|
0.43
|
|
marrcoh
|
1 if
married or in cohabitation; 0 otherwise; reference: single
|
-
|
0.67
|
0.47
|
0.54
|
0.5
|
|
divsep
|
1 if
divorced or separated; 0 otherwise; reference: single
|
-
|
0.08
|
0.27
|
0.13
|
0.33
|
|
widow
|
1 if
widowed; 0 otherwise; reference: single
|
-
|
0.09
|
0.28
|
0.12
|
0.32
|
|
urban
|
1 if
living in urban area; 0 otherwise
|
-
|
0.24
|
0.43
|
0.25
|
0.43
|
|
child
|
1 if
person has a child; 0 otherwise
|
-
|
0.75
|
0.43
|
0.69
|
0.46
|
|
trust
|
average
of trust in people, legal system and police; 1-10 scale; higher value means
higher trust
|
-
|
5.54
|
1.96
|
5.30
|
1.95
|
|
Countries
|
Year
|
|
2007
|
2011
|
|
N
|
%
of total N
|
N
|
%
of total N
|
|
AT
|
534
|
2.8
|
729
|
2.9
|
|
BE
|
713
|
3.8
|
734
|
2.9
|
|
BG
|
586
|
3.1
|
691
|
2.8
|
|
CY
|
683
|
3.6
|
586
|
2.3
|
|
CZ
|
749
|
4.0
|
708
|
2.8
|
|
DE
|
1364
|
7.2
|
2312
|
9.2
|
|
DK
|
772
|
4.1
|
841
|
3.3
|
|
EE
|
740
|
3.9
|
702
|
2.8
|
|
EL
|
702
|
3.7
|
658
|
2.6
|
|
ES
|
451
|
2.4
|
901
|
3.6
|
|
FI
|
774
|
4.1
|
852
|
3.4
|
|
FR
|
1126
|
6.0
|
1889
|
7.5
|
|
HU
|
686
|
3.6
|
690
|
2.7
|
|
IE
|
403
|
2.1
|
807
|
3.2
|
|
IT
|
484
|
2.6
|
1407
|
5.6
|
|
LT
|
749
|
4.0
|
897
|
3.6
|
|
LU
|
484
|
2.6
|
650
|
2.6
|
|
LV
|
591
|
3.1
|
756
|
3.0
|
|
MT
|
528
|
2.8
|
474
|
1.9
|
|
NL
|
771
|
4.1
|
811
|
3.2
|
|
PL
|
936
|
5.0
|
1632
|
6.5
|
|
PT
|
376
|
2.0
|
544
|
2.2
|
|
RO
|
638
|
3.4
|
1148
|
4.6
|
|
SE
|
900
|
4.8
|
820
|
3.3
|
|
SI
|
650
|
3.4
|
623
|
2.5
|
|
SK
|
731
|
3.9
|
656
|
2.6
|
|
UK
|
778
|
4.1
|
1599
|
6.4
|
|
18899
|
100.0
|
25117
|
100,0
|
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