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Econometric Identification of the Cost of Maintaining a Child

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Author Info

  • Federico Perali

    ()
    (Department of Economics (University of Verona))

  • Martina Menon

    ()
    (Department of Economics (University of Verona))

Abstract

The paper estimates the cost of maintaining a child, of different ages, the cost of being a single and the cost of additional adults present in a family with the aim of making the income levels of different households comparable. The study investigates the issue of econometric identification of equivalence scales within a demand system modified to include demographic characteristics consistently with economic theory. It shows that a robust estimation of equivalence scales must take into formal consideration the problem of econometric identification. The estimation also proposes an encompassing demographic specification which permits isolation of the costs due to differences in needs and differences in household life-styles and scale economies.

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Bibliographic Info

Paper provided by University of Verona, Department of Economics in its series Working Papers with number 63/2009.

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Length: 36
Date of creation: Oct 2009
Date of revision:
Handle: RePEc:ver:wpaper:63/2009

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Related research

Keywords: Equivalence scales; identification; interhousehold comparisons; economies of scale;

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Cited by:
  1. Ismael Ahamdanech-Zarco & John A. Bishop & Andrew Grodner & Haiyong Liu, 2011. "Subjective poverty equivalence scales for Euro Zone countries," Working Papers 233, ECINEQ, Society for the Study of Economic Inequality.
  2. Hori, Masahiro, 2011. "The expenditure on children in Japan," CIS Discussion paper series 527, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  3. Fabrizio Balli, 2012. "Are Traditional Equivalence Scales Still Useful? A Review and A Possible Answer," Department of Economics University of Siena 656, Department of Economics, University of Siena.
  4. Fabrizio Balli & Silvia Tiezzi, 2011. "Equivalence Scales Declining with Expenditure: Evidence and Implications for Income Distribution," Department of Economics University of Siena 611, Department of Economics, University of Siena.

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