Disposable equivalent income is calculated on the basis of disposable household income, taking into account the size and composition of households by applying an equivalence scale (modified OECD scale): The oldest person is weighted at 1.0, each additional person aged 14 and over at 0.5, and each child under 14 at 0.3. This takes into account the economies of scale resulting from the grouping of several people in a single household. For example, a four-person household does not usually need four times as much expenditure to achieve the same standard of living as a single-person household. Equivalent disposable income is assigned to each member of the household for individual-level analysis. It is used, among other things, to estimate the standard of living.
