Measuring poverty changes with bounded equivalence scales: Australia in the 1980s

When measuring poverty, an equivalence scale is used to take account of the different income needs of different family types. However, there is little consensus about the choice of scale. A method is presented here that permits general statements about changes in poverty to be made which will be true for a range of equivalence scales. The method is used to describe changes in poverty in Australia between 1981-82 and 1989-90. Different scales lead to estimates of the increase in the head count poverty rate between 1981-82 and 1989-90 of between +1.7 and -0.6 percentage points (at commonly chosen poverty thresholds).