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Econometric Identification of the Cost of Maintaining a Child

Author

Listed:
  • Federico Perali

    () (Department of Economics (University of Verona))

  • Martina Menon

    () (Department of Economics (University of Verona))

Abstract

The paper estimates the cost of maintaining a child, of different ages, the cost of being a single and the cost of additional adults present in a family with the aim of making the income levels of different households comparable. 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 estimation also proposes an encompassing demographic specification which permits isolation of the costs due to differences in needs and differences in household life-styles and scale economies.

Suggested Citation

  • Federico Perali & Martina Menon, 2009. "Econometric Identification of the Cost of Maintaining a Child," Working Papers 63/2009, University of Verona, Department of Economics.
  • Handle: RePEc:ver:wpaper:63/2009
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    Cited by:

    1. Chavas, Jean-Paul & Menon, Martina & Pagani, Elisa & Perali, Federico, 0. "Collective household welfare and intra-household inequality," Theoretical Economics, Econometric Society.
    2. Antonella Caiumi & Federico Perali, 2015. "Who bears the full cost of children? Evidence from a collective demand system," Empirical Economics, Springer, vol. 49(1), pages 33-64, August.
    3. MENON Martina & PERALI Federico & SIERMINSKA Eva, 2016. "An Asset-based Indicator of Wellbeing for a Unified Means Testing Tool: Money Metric or Counting Approach?," LISER Working Paper Series 2016-09, LISER.
    4. Fabrizio Balli & Silvia Tiezzi, 2011. "Equivalence Scales Declining with Expenditure: Evidence and Implications for Income Distribution," Department of Economics University of Siena 611, Department of Economics, University of Siena.
    5. John Bishop & Andrew Grodner & Haiyong Liu & Ismael Ahamdanech-Zarco, 2014. "Subjective poverty equivalence scales for Euro Zone countries," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(2), pages 265-278, June.
    6. Ismael Ahamdanech-Zarco & John A. Bishop & Andrew Grodner & Haiyong Liu, 2011. "Subjective poverty equivalence scales for Euro Zone countries," Working Papers 233, ECINEQ, Society for the Study of Economic Inequality.
    7. HORI Masahiro, 2011. "The expenditure on children in Japan," ESRI Discussion paper series 279, Economic and Social Research Institute (ESRI).
    8. Fabrizio Balli, 2012. "Are Traditional Equivalence Scales Still Useful? A Review and A Possible Answer," Department of Economics University of Siena 656, Department of Economics, University of Siena.

    More about this item

    Keywords

    Equivalence scales; identification; interhousehold comparisons; economies of scale;

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