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Mismeasured Household Size and Its Implications for the Identification of Economies of Scale

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  • Halliday, Timothy J.

    (University of Hawaii at Manoa)

Abstract

We consider the possibility that demographic variables are measured with errors which arise because household surveys measure demographic structures at a point-in-time, whereas household composition evolves throughout the survey period. We construct and estimate sharp bounds on household size and find that the degree of these measurement errors is non-trivial. However, while these errors have the potential to resolve the Deaton-Paxson paradox, they fail to do so.

Suggested Citation

  • Halliday, Timothy J., 2008. "Mismeasured Household Size and Its Implications for the Identification of Economies of Scale," IZA Discussion Papers 3896, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3896
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    References listed on IDEAS

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    1. Li Gan & Victoria Vernon, 2003. "Testing the Barten Model of Economies of Scale in Household Consumption: Toward Resolving a Paradox of Deaton and Paxson," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1361-1377, December.
    2. J. Gibson & S. Rozelle, 2002. "How Elastic is Calorie Demand? Parametric, Nonparametric, and Semiparametric Results for Urban Papua New Guinea," Journal of Development Studies, Taylor & Francis Journals, vol. 38(6), pages 23-46.
    3. Abhijit V. Banerjee & Esther Duflo, 2007. "The Economic Lives of the Poor," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 141-168, Winter.
    4. Hu, Yingyao, 2006. "Bounding parameters in a linear regression model with a mismeasured regressor using additional information," Journal of Econometrics, Elsevier, vol. 133(1), pages 51-70, July.
    5. Timothy J. Halliday, 2010. "Mismeasured Household Size and its Implications for the Identification of Economies of Scale," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(2), pages 246-262, April.
    6. Hyslop, Dean R & Imbens, Guido W, 2001. "Bias from Classical and Other Forms of Measurement Error," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 475-481, October.
    7. Angus Deaton & Christina Paxson, 1998. "Economies of Scale, Household Size, and the Demand for Food," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 897-930, October.
    8. Guido W. Imbens & Charles F. Manski, 2004. "Confidence Intervals for Partially Identified Parameters," Econometrica, Econometric Society, vol. 72(6), pages 1845-1857, November.
    9. Trevon D. Logan, 2011. "Economies Of Scale In The Household: Puzzles And Patterns From The American Past," Economic Inquiry, Western Economic Association International, vol. 49(4), pages 1008-1028, October.
    10. 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 720-744, August.
    11. Lanjouw, Peter & Ravallion, Martin, 1995. "Poverty and Household Size," Economic Journal, Royal Economic Society, vol. 105(433), pages 1415-1434, November.
    12. John Gibson, 2002. "Why Does the Engel Method Work? Food Demand, Economies of Size and Household Survey Methods," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(4), pages 341-359, September.
    13. Aprajit Mahajan, 2006. "Identification and Estimation of Regression Models with Misclassification," Econometrica, Econometric Society, vol. 74(3), pages 631-665, May.
    14. Angus Deaton & Christina Paxson, 2003. "Engel's What? A Response to Gan and Vernon," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1378-1381, December.
    15. Gibson, John, 2001. "Measuring chronic poverty without a panel," Journal of Development Economics, Elsevier, vol. 65(2), pages 243-266, August.
    16. repec:bla:obuest:v:64:y:2002:i:4:p:341-59 is not listed on IDEAS
    17. John Gibson & Bonggeun Kim, 2007. "Measurement Error in Recall Surveys and the Relationship between Household Size and Food Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 473-489.
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    Cited by:

    1. Timothy J. Halliday, 2010. "Mismeasured Household Size and its Implications for the Identification of Economies of Scale," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(2), pages 246-262, April.
    2. Gibson, John & Kim, Bonggeun, 2013. "How reliable are household expenditures as a proxy for permanent income? Implications for the income–nutrition relationship," Economics Letters, Elsevier, vol. 118(1), pages 23-25.
    3. John Gibson, 2016. "Measuring Chronic Hunger from Diet Snapshots: Why 'Bottom up' Survey Counts and 'Top down' FAO Estimates Will Never Meet," Working Papers in Economics 16/07, University of Waikato.

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    More about this item

    Keywords

    semi-parametric bounds; measurement error; migration; economies of scale;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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