Differences in Needs and Assessment of Income Distributions*

ABSTRACT The literatures on the assessment of income distributions and on differences in needs are not well integrated. The theoretical literature providing results about evaluations and comparisons of income distributions does not, in the main, consider the implications of non‐income differences between income‐receiving units, while the equivalence scale literature providing results about the relationship between living standards, incomes and household composition does not consider distributional implications. The aim of this survey is to go some way towards integrating these separate literatures; to consider how to evaluate and compare income distributions while at the same time taking explicit account of differences in household composition.