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The Measurement of Child Costs: A Rothbarth-Type Method Consistent with Scale Economies

  • Bargain, Olivier

    ()

    (University of Aix-Marseille II)

  • Donni, Olivier

    ()

    (University of Cergy-Pontoise)

We propose a new methodology to estimate the share of household income accruing to children (i.e., the cost of children). Following the principle of the Rothbarth approach, the identification of the children's share requires the observation of at least one adult-specific good. However, our method differs from this traditional approach in that it allows measuring economies of scale in the household and indifference scales in Lewbel (2003)'s sense. We illustrate the method with an application on the French Household Budget Survey.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4654.

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Length: 34 pages
Date of creation: Dec 2009
Date of revision:
Publication status: published as 'Expenditure on Children: A Rothbarth-Type Method Consistent with Scale Economies and Parents' Bargaining' in: European Economic Review, 2012, 56 (4), 792-813
Handle: RePEc:iza:izadps:dp4654
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  1. Olivier Donni, 2009. "A Simple Approach to Investigate Intrahousehold Allocation of Private and Public Goods," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 617-628, August.
  2. repec:inr:wpaper:249984 is not listed on IDEAS
  3. Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-85, May.
  4. Blundell, Richard & Robin, Jean Marc, 1999. "Estimation in Large and Disaggregated Demand Systems: An Estimator for Conditionally Linear Systems," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(3), pages 209-32, May-June.
  5. Arthur Lewbel & Krishna Pendakur, 2008. "Estimation of Collective Household Models With Engel Curves," Boston College Working Papers in Economics 694, Boston College Department of Economics.
  6. Bernarda Zamora, 2011. "Does female participation affect the sharing rule?," Journal of Population Economics, Springer, vol. 24(1), pages 47-83, January.
  7. Deaton, A. & Paxson, C., 1997. "Economies of Scale, Household Size, and the Demand for Food," Papers 178, Princeton, Woodrow Wilson School - Development Studies.
  8. Richard Blundell & Jean-Marc Robin, 2000. "Latent Separability: Grouping Goods without Weak Separability," Econometrica, Econometric Society, vol. 68(1), pages 53-84, January.
  9. Arthur Lewbel, 2002. "Calculating Compensation in Cases of Wrongful Death," Boston College Working Papers in Economics 523, Boston College Department of Economics, revised 07 Jun 2002.
  10. Donni Olivier & Bargain Olivier, 2011. "Targeting and Child Poverty," THEMA Working Papers 2011-05, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  11. Lewbel, Arthur, 1991. "Cost of characteristics indices and household equivalence scales," European Economic Review, Elsevier, vol. 35(6), pages 1277-1293, August.
  12. Deaton, Angus S & Ruiz-Castillo, Javier & Thomas, Duncan, 1989. "The Influence of Household Composition on Household Expenditure Patterns: Theory and Spanish Evidence," Journal of Political Economy, University of Chicago Press, vol. 97(1), pages 179-200, February.
  13. Pollak, Robert A & Wales, Terence J, 1979. "Welfare Comparisons and Equivalence Scales," American Economic Review, American Economic Association, vol. 69(2), pages 216-21, May.
  14. Lazear, Edward P. & Michael, Robert T., 1988. "Allocation of Income within the Household," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226469669.
  15. 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.
  16. Olivier Bargain & Olivier Donni & Monnet Gbakou, 2010. "The Measurement of Child Costs: Evidence from Ireland," Working Papers 201002, School Of Economics, University College Dublin.
  17. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
  18. Browning, Martin, 1992. "Children and Household Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1434-75, September.
  19. Gronau, Reuben, 1988. "Consumption Technology and the Intrafamily Distribution of Resources:," Journal of Political Economy, University of Chicago Press, vol. 96(6), pages 1183-1205, December.
  20. Nelson, Julie A, 1988. "Household Economies of Scale in Consumption: Theory and Evidence," Econometrica, Econometric Society, vol. 56(6), pages 1301-14, November.
  21. Matzkin, Rosa L., 2007. "Nonparametric identification," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 73 Elsevier.
  22. Gronau, Reuben, 1991. "The Intrafamily Allocation of Goods--How to Separate the Adult from the Child," Journal of Labor Economics, University of Chicago Press, vol. 9(3), pages 207-35, July.
  23. Tsakloglou, Panos, 1991. "Estimation and Comparison of Two Simple Models of Equivalence Scales for the Cost of Children," Economic Journal, Royal Economic Society, vol. 101(405), pages 343-57, March.
  24. Lewbel, Arthur, 1989. "Household equivalence scales and welfare comparisons," Journal of Public Economics, Elsevier, vol. 39(3), pages 377-391, August.
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