Equivalisation is a technique in economics

Economics

Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

 in which members of a household

Household

The household is "the basic residential unit in which economic production, consumption, inheritance, child rearing, and shelter are organized and carried out"; [the household] "may or may not be synonymous with family"....

 receive different weighting

Weighting

The process of weighting involves emphasizing the contribution of some aspects of a phenomenon to a final effect or result — giving them 'more weight' in the analysis. That is, rather than each variable in the data contributing equally to the final result, some data are adjusted to contribute...

s. Total household income is then divided by the sum of the weightings to yield a representative income.

The OECD uses the following weightings:

• 1.0 to the first adult;
• 0.5 to the second and each subsequent person aged 14 and over;
• 0.3 to each child aged under 14.

In the British households below average income calculation, before housing cost is figured, the weightings are as follows:

• 0.67 for the first adult;
• 0.33 for every other adult or child above 14 years of age;
• 0.2 for every child under 14 years of age.

So the reference case is a childless couple. Alternative weightings can be based on formulae which decline with the number of people in a household.