Equivalisation is a technique in economics in which members of a household receive different weightings.
[2] The OECD-modified scale is widely used across Europe and used by the Statistical Office of the European Union (Eurostat).
To calculate equivalised income using the modified OECD equivalence scale, each member of the household is first given an equivalence value: Single adult households are taken as the reference group and are given a value of 1.
For larger households, each additional adult is given a smaller value of 0.5 to reflect the economies of scale achieved when people live together, arising when households share resources such as water and electricity, which reduces living costs per person.
Children under the age of 14 are given a value of 0.3 to take account of their lower living costs, while children aged 14 and over are given a value of 0.5 because their living costs are assumed to be the same as an adult.