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The Measurement of Child Costs: A Rothbarth-Type Method Consistent with Scale Economies

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  • Bargain, Olivier

    ()
    (University of Aix-Marseille II)

  • Donni, Olivier

    ()
    (University of Cergy-Pontoise)

Abstract

We propose a new methodology to estimate the share of household income accruing to children (i.e., the cost of children). Following the principle of the Rothbarth approach, the identification of the children's share requires the observation of at least one adult-specific good. However, our method differs from this traditional approach in that it allows measuring economies of scale in the household and indifference scales in Lewbel (2003)'s sense. We illustrate the method with an application on the French Household Budget Survey.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4654.

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Length: 34 pages
Date of creation: Dec 2009
Date of revision:
Publication status: published as 'Expenditure on Children: A Rothbarth-Type Method Consistent with Scale Economies and Parents' Bargaining' in: European Economic Review, 2012, 56 (4), 792-813
Handle: RePEc:iza:izadps:dp4654

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Keywords: Rothbarth method; consumer demand; cost of children; scale economies; indifference scales; equivalence scales; collective model;

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References

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  1. Olivier Donni, 2009. "A Simple Approach to Investigate Intrahousehold Allocation of Private and Public Goods," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 617-628, August.
  2. Bargain, Olivier & Donni, Olivier & Gbakou, Monnet Benoit Patrick, 2009. "The Measurement of Child Costs: Evidence from Ireland," IZA Discussion Papers 4672, Institute for the Study of Labor (IZA).
  3. Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, Econometric Society, vol. 54(3), pages 679-85, May.
  4. Bernarda Zamora, 2007. "Does Female Participation Affect The Sharing Rule?," Working Papers. Serie AD, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) 2007-07, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  5. Deaton, Angus S & Muellbauer, John, 1986. "On Measuring Child Costs: With Applications to Poor Countries," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 94(4), pages 720-44, August.
  6. Matzkin, Rosa L., 2007. "Nonparametric identification," Handbook of Econometrics, Elsevier, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 73 Elsevier.
  7. Lewbel, Arthur & Pendakur, Krishna, 2008. "Estimation of collective household models with Engel curves," Journal of Econometrics, Elsevier, Elsevier, vol. 147(2), pages 350-358, December.
  8. Lewbel, Arthur, 2003. "Calculating compensation in cases of wrongful death," Journal of Econometrics, Elsevier, Elsevier, vol. 113(1), pages 115-128, March.
  9. Lewbel, Arthur, 1989. "Household equivalence scales and welfare comparisons," Journal of Public Economics, Elsevier, Elsevier, vol. 39(3), pages 377-391, August.
  10. Gronau, Reuben, 1991. "The Intrafamily Allocation of Goods--How to Separate the Adult from the Child," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 9(3), pages 207-35, July.
  11. Nelson, Julie A, 1988. "Household Economies of Scale in Consumption: Theory and Evidence," Econometrica, Econometric Society, Econometric Society, vol. 56(6), pages 1301-14, November.
  12. Blundell, Richard & Robin, Jean Marc, 1999. "Estimation in Large and Disaggregated Demand Systems: An Estimator for Conditionally Linear Systems," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 14(3), pages 209-32, May-June.
  13. Olivier Bargain & Olivier Donni, 2012. "Targeting and child poverty," Social Choice and Welfare, Springer, Springer, vol. 39(4), pages 783-808, October.
  14. Deaton, Angus S & Ruiz-Castillo, Javier & Thomas, Duncan, 1989. "The Influence of Household Composition on Household Expenditure Patterns: Theory and Spanish Evidence," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 97(1), pages 179-200, February.
  15. Browning, Martin, 1992. "Children and Household Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1434-75, September.
  16. Lewbel, Arthur, 1991. "Cost of characteristics indices and household equivalence scales," European Economic Review, Elsevier, Elsevier, vol. 35(6), pages 1277-1293, August.
  17. Lazear, Edward P. & Michael, Robert T., 1988. "Allocation of Income within the Household," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226469669.
  18. repec:inr:wpaper:249984 is not listed on IDEAS
  19. Angus Deaton & Christina Paxson, 1998. "Economies of Scale, Household Size, and the Demand for Food," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 106(5), pages 897-930, October.
  20. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
  21. Gronau, Reuben, 1988. "Consumption Technology and the Intrafamily Distribution of Resources:," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 96(6), pages 1183-1205, December.
  22. Richard Blundell & Jean-Marc Robin, 2000. "Latent Separability: Grouping Goods without Weak Separability," Econometrica, Econometric Society, Econometric Society, vol. 68(1), pages 53-84, January.
  23. Tsakloglou, Panos, 1991. "Estimation and Comparison of Two Simple Models of Equivalence Scales for the Cost of Children," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 101(405), pages 343-57, March.
  24. Pollak, Robert A & Wales, Terence J, 1979. "Welfare Comparisons and Equivalence Scales," American Economic Review, American Economic Association, American Economic Association, vol. 69(2), pages 216-21, May.
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Cited by:
  1. Laurens CHERCHYE & Bram DE ROCK & Arthur LEWBEL & Frederic VERMEULEN, 2012. "Sharing rule identification for general collective consumption models," Center for Economic Studies - Discussion papers, Katholieke Universiteit Leuven, Centrum voor Economische Studiën ces12.05, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  2. Hori, Masahiro, 2011. "The expenditure on children in Japan," CIS Discussion paper series, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University 527, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  3. Olivier Bargain & Olivier Donni & Monnet Gbakou, 2010. "The Measurement of Child Costs: Evidence from Ireland," Working Papers, School Of Economics, University College Dublin 201002, School Of Economics, University College Dublin.
  4. Christopher R. Bollinger & Cheti Nicoletti & Stephen Pudney, 2012. "Two can live as cheaply as one... But three's a crowd," Discussion Papers, Department of Economics, University of York 12/23, Department of Economics, University of York.
  5. Olivier Bargain & Olivier Donni & Prudence Kwenda, 2011. "Intrahousehold Distribution and Child Poverty: Theory and Evidence from Côte d'Ivoire," Working Papers, Human Capital and Economic Opportunity Working Group 2011-031, Human Capital and Economic Opportunity Working Group.

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