Equivalized Income

Equivalized income adjusts household income to reflect that a family of four doesn't need 4× the income of a single person to maintain the same living standard. This is because households share major expenses like housing, utilities, and transportation.

How It Works (OECD-Modified Scale):

• First adult: 1.0
• Additional adults: 0.5 each
• Children (under 14): 0.3 each

Example: Family with $100,000 income:

• 2 adults + 2 children = equivalence factor of 2.1 (1.0 + 0.5 + 0.3 + 0.3)
• Equivalized income: $100,000 ÷ 2.1 = $47,619 per equivalent adult

This $47,619 represents the income a single person would need to have the same standard of living.

Why It Matters:

• Fair Comparisons: Compares living standards across different household sizes
• Global Income Rankings: The Global Income Percentile Calculator uses this to fairly rank you against worldwide households
• Policy Decisions: Governments use it to determine poverty thresholds and benefits eligibility

Real-World Impact: A single person earning $50,000 and a family of four earning $105,000 have roughly equivalent living standards after accounting for shared household costs.

The Bottom Line: Raw household income doesn't tell the full story—equivalized income shows your actual purchasing power per person after accounting for shared costs.