From Chapter 6 of The Economic and Health Status of Households by Brian Easton and Suzie Ballantyne.
The authors would like to acknowledge the significant contribution of Claudio Michelini to the development of empirically based equivalence scales in New Zealand, the topic of this chapter. Claudio had worked on the underlying theory (the preference-consistent Extended Linear Expenditure System) as a part of his postgraduate work at the University of Bristol. But in those days the computing power was insufficient to cope with the non-linear estimation that (ironically) the linear theory required.
He put the work aside but returned to it in the late 1990s, using the quasi-unit household data set, which despite each observation being an average of three households (to guarantee respondents’ confidentiality), had been structured to maintain sufficient of the underlying empirical reality to enable the estimation of empirically based household equivalence scales. (Michelini 1998, 2000, 2001) He readily contributed his results to this project and many were the lively sessions the authors had with him as he enthusiastically and cheerfully discussed the development of his work.
What we did not know is that he was visiting Wellington from Palmerston North, where he was a Senior Lecturer at Massey University, to see a specialist about what proved to be a brain tumour. Alas it had advanced too far, and Claudio did not recover from the operation. At 59 he was in the prime of his life as a teacher, as a researcher and as a friend.
The impact of an individual’s life may be thought of as a series of increasing circles beginning with the innermost one of one’s family and then moving out through friends, neighbours, and colleagues to the wider world. It will soon become apparent that this chapter is in part about the impact of Claudio’s last research on the wider world. His interest was primarily about the application of some technical econometrics, but the outcome has practical implications, affecting not just research outcomes as discussed in the next chapter, but through them to the way we understand the income distribution and the way we manage it. Ultimately his work will enable New Zealand to have a more efficient and equitable distribution of the nation’s income.
This chapter makes use of Claudio’s findings, but also discusses its limitations. Claudio would not have objected, for we were discussing them just before he went into hospital. The resolutions we suggest here were those he planned to investigate after he recovered. His work is incomplete. We regret, and the research community and the nation may regret, he was unable to complete it.
Brian Easton and Suzie Ballantyne
A footnote from The Listener column of 29 April 2000.
Claudio Michelini (1940.2000)
One of those wonderfully eccentric immigrants who have given this country so much character.
Massey University econometrician Claudio Michelini, died unexpectedly a month ago He deserves mention in this column as an example of one of economics many trojans. They are rarely in the public eye, but they carry out their professional tasks competently, honestly and, in Claudio’s case. with cheerful enthusiasm. His research, too technical to report here, has a practical importance to our understanding of how households behave.
Two people living separately cost more to attain the same standard of living than if they live together But by how much? Fair treatment of the social security benefit rates for couples and singles depends on the answer Get it wrong, and either some benefits will be paid at too high a rate, adding to the tax burden, or some benefits will be set too low and beneficiaries remain in poverty. In the past. we guessed the relativity. Claudio left behind a body of research that helps assess scientifically this and other important questions about households We only notice the trojans when they are gone.