Equivalized

Equivalized is an adjective used in economics and social statistics to describe data that have been adjusted with an equivalence scale to reflect differences in household size and composition. The goal is to enable fairer comparisons of resources such as income or consumption across households of varying sizes.

An equivalence scale assigns a weight to each household member. The most common is the OECD-modified scale: first adult 1.0, each additional adult 0.5, and each child 0.3. The equivalized value is found by dividing the household's total income (or expenditure) by the sum of the weights. For example, a household of two adults and two children with total income of 40,000 has weights 1.0 + 0.5 + 0.3 + 0.3 = 2.1, yielding an equivalized income of about 19,048.

Applications of equivalized figures include poverty measurement, living standards analyses, and cross-country comparisons of welfare. Limitations include dependence on the chosen scale—different scales can produce different results—and the fact that equivalized measures do not capture all aspects of welfare, such as regional cost variations, health needs, or intra-household inequality. Equivalized statistics are widely used in national accounts, household surveys, and policy research to assess and compare relative living standards while accounting for household size and composition.