Extending the Collective Approach to Children: A Rothbarth-Type Measure of Child Costs Consistent with Scale Economies and Parents Bargaining

We extend the collective model of household consumption to account explicitly for child welfare and economies of scale. Each household member is characterized by specific preferences and the (unspecified) allocation process is assumed to be efficient. Following the principle of the Rothbarth approach, the identification of the children's share requires the observation of adult-specific goods. The share of household income accruing to children in this context o¤ers a new measure of the cost of children, i.e., it differs from the traditional approach in that it is compatible with economies of scale and parents' bargaining. We illustrate the method with an application on the French Household Budget Survey.