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Revisiting the cost of children : theory and evidence from Ireland

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  • Olivier Bargain
  • Olivier Donni

Abstract

In this paper, we suggest a collective model with parents and (young) children. We identify and estimate scale economies in households and the sharing rule between husband, wife and children. While adult shares and economies of scale are identi?ed thanks to the estimation of individual Engel curves on single individuals, the identi?cation of the resource share accruing to children (the cost of children) requires the observation of adult-speci?c goods as in the traditional Rothbarth method. The useful aspect of the present approach is that it requires only the estimation of Engel curves on cross-sectional data, i.e. price variation is not required. This is an advan- tage for many countries where price variations is indeed limited, as in our application on Irish data.

Suggested Citation

  • Olivier Bargain & Olivier Donni, 2009. "Revisiting the cost of children : theory and evidence from Ireland," Open Access publications 10197/2014, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:oapubs:10197/2014
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    File URL: http://hdl.handle.net/10197/2014
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    References listed on IDEAS

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    Cited by:

    1. Martina Menon & Federico Perali, 2012. "The Sharing Rule: Where Is It?," Working Papers 16/2012, University of Verona, Department of Economics.

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    More about this item

    Keywords

    Consumer demand; Collective model; Sharing rule; Cost of children; Equivalence scales; Indifference scales; Home economics--Accounting; Child rearing--Economic aspects--Ireland; Consumption (Economics);
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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