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Chapter 10 Econometric identification of the cost of maintaining a child

In: Studies in Applied Welfare Analysis: Papers from the Third ECINEQ Meeting

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  • Martina Menon
  • Federico Perali

Abstract

The chapter estimates the cost of maintaining a child, at different ages, the cost of being single, and the cost of additional adults present in a family, with the aim of making comparable the income levels of different households. 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 estimate also puts forward all-encompassing demographic specifications to identify costs due to differences in needs, household lifestyles, and economies of scale.

Suggested Citation

  • Martina Menon & Federico Perali, 2010. "Chapter 10 Econometric identification of the cost of maintaining a child," Research on Economic Inequality, in: Studies in Applied Welfare Analysis: Papers from the Third ECINEQ Meeting, pages 219-255, Emerald Group Publishing Limited.
  • Handle: RePEc:eme:reinzz:s1049-2585(2010)0000018013
    DOI: 10.1108/S1049-2585(2010)0000018013
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    Cited by:

    1. Menon, Martina & Perali, Federico & Ray, Ranjan & Tommasi, Nicola, 2023. "Heterogeneity in prices and cost of living within a country: New evidence on the north-south divide in Italy," Economic Modelling, Elsevier, vol. 126(C).

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