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The Price, Cost, Consumption and Value of Children

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  • Bruce Bradbury

    (UNSW)

Abstract

Though they are related, the price, cost, consumption and value of children are not the same. This paper explores two aspects of the relationship between these concepts. Even if we restrict attention to the domain of commodity consumption, the cost of children is not the same as children's consumption. In this context, the cost of children to their parents is often described with a consumer equivalence scale. It is shown here that, under reasonable assumptions, children's consumption of market goods is less than the 'equivalent income' of the household, but more than the 'cost of children'. Expenditure costs, however, are only part of the cost of children. This paper uses a variant of the 'adult goods' method to estimate the full costs of children, including both expenditure and time costs. Adult personal time (comprising pure leisure, sleep and other personal care) is used as the adult good. Preliminary estimates using Australian data suggest a very large cost of children. The paper discusses the limitations of the estimation approach and considers the broader welfare implications of these costs.

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Bibliographic Info

Paper provided by EconWPA in its series Labor and Demography with number 0402003.

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Date of creation: 12 Feb 2004
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Handle: RePEc:wpa:wuwpla:0402003

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Web page: http://128.118.178.162

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Keywords: Consumer equivalence scales Time use Children's consumption Cost of children Adult goods;

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  1. Nelson, Julie A, 1992. "Methods of Estimating Household Equivalence Scales: An Empirical Investigation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 38(3), pages 295-310, September.
  2. Bradbury, Bruce, 1994. "Measuring the Cost of Children," Australian Economic Papers, Wiley Blackwell, vol. 33(62), pages 120-38, June.
  3. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
  4. Nelson, Julie A, 1988. "Household Economies of Scale in Consumption: Theory and Evidence," Econometrica, Econometric Society, vol. 56(6), pages 1301-14, November.
  5. Killingsworth, Mark R. & Heckman, James J., 1987. "Female labor supply: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 2, pages 103-204 Elsevier.
  6. Pencavel, John, 1987. "Labor supply of men: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 1, pages 3-102 Elsevier.
  7. Deaton, Angus S & Muellbauer, John, 1986. "On Measuring Child Costs: With Applications to Poor Countries," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 720-44, August.
  8. Buhmann, Brigitte, et al, 1988. "Equivalence Scales, Well-Being, Inequality, and Poverty: Sensitivity Estimates across Ten Countries Using the Luxembourg Income Study (LIS) Database," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(2), pages 115-42, June.
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Cited by:
  1. François Gardes & Imen Sayadi & Christophe Starzec, 2013. "Les échelles d'équivalence complètes : une estimation intégrant les dimensions monétaire et temporelle des dépenses des ménages," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00940266, HAL.
  2. François Gardes & Imen Sayadi & Christophe Starzec, 2013. "Les échelles d'équivalence complètes : une estimation intégrant les dimensions monétaire et temporelle des dépenses des ménages," Documents de travail du Centre d'Economie de la Sorbonne 13084, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  3. Holly Sutherland & Christine Lietz & Horacio Levy, 2005. "Alternative Tax-benefit Strategies to Support Children in the European Union. Recent Reforms in Austria, Spain and the United Kingdom," Innocenti Working Papers inwopa05/33, UNICEF Innocenti Research Centre.

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