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What Is The Income "Cost Of A Child"? Exact Equivalence Scales For Canadian Two-Parent Families

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  • Shelley A. Phipps

Abstract

This note asks: "How much income does it take to preserve the prechild standard of living for all members of the postchild household?" Equivalence scales for Canadian two-parent families are estimated using a complete demand system approach and imposing the condition of equivalence scale exactness/independent of a base (Blackorby and Donaldson (1993), Lewbel (1989)). This approach has several advantages: (1) It is formally grounded in economic theory. (2) The income required for children can be estimated without ignoring the well-being of the children themselves. (3) The estimates obtained appear reasonable relative to others currently available in the literature. © 1998 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Suggested Citation

  • Shelley A. Phipps, 1998. "What Is The Income "Cost Of A Child"? Exact Equivalence Scales For Canadian Two-Parent Families," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 157-164, February.
  • Handle: RePEc:tpr:restat:v:80:y:1998:i:1:p:157-164
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    1. Gould, Brian W. & Yen, Steven T., 2002. "Food Demand In Mexico: A Quasi-Maximum Likelihood Approach," 2002 Annual meeting, July 28-31, Long Beach, CA 19667, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Urvashi Dhawan-Biswal, 2002. "Consumption and Income Inequality: The Case of Atlantic Canada from 1969­1996," Canadian Public Policy, University of Toronto Press, vol. 28(4), pages 513-537, December.
    3. White, Howard & Masset, Edoardo, 2002. "Child poverty in Vietnam: using adult equivalence scales to estimate income-poverty for different age groups," MPRA Paper 777, University Library of Munich, Germany.
    4. Perali, Federico, 2008. "The second Engel law: Is it a paradox?," European Economic Review, Elsevier, vol. 52(8), pages 1353-1377, November.
    5. Alois Guger & Reiner Buchegger & Hedwig Lutz & Christine Mayrhuber & Michael Wüger, 2003. "Schätzung der direkten und indirekten Kinderkosten," WIFO Studies, WIFO, number 24078, June.
    6. Garcia-Diaz Rocio, 2012. "Demand-Based Cost-of-Children Estimates and Child Poverty," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-32, January.
    7. Kevin Milligan, 2005. "Subsidizing the Stork: New Evidence on Tax Incentives and Fertility," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 539-555, August.
    8. Brian W. Gould, 2002. "Household composition and food expenditures in China," Agribusiness, John Wiley & Sons, Ltd., vol. 18(3), pages 387-407.
    9. Gould, Brian W. & Sabates, Ricardo, 2001. "The Structure Of Food Demand In Urban China: A Demand System Approach," 2001 Annual meeting, August 5-8, Chicago, IL 20778, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Edith Duclos & Pierre Lefebvre & Philip Merrigan, 2001. "A 'Natural Experiment' on the Economics of Storks: Evidence on the Impact of Differential Family Policy on Fertility Rates in Canada," Cahiers de recherche CREFE / CREFE Working Papers 136, CREFE, Université du Québec à Montréal.
    11. David Hummels & Chong Xiang & Yo Chul Choi, 2010. "Explaining Import Variety and Quality: the Role of the Income Distribution," LIS Working papers 541, LIS Cross-National Data Center in Luxembourg.
    12. Gould, Brian W. & Lee, Yoonjung & Dong, Diansheng & Villarreal, Hector J., 2002. "Household Size And Composition Impacts On Meat Demand In Mexico: A Censored Demand System Approach," 2002 Annual meeting, July 28-31, Long Beach, CA 19722, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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