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The Price, Cost, Consumption and Value of Children

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  • Bruce Bradbury

    (UNSW)

Abstract

Though they are related, the price, cost, consumption and value of children are not the same. This paper explores two aspects of the relationship between these concepts. Even if we restrict attention to the domain of commodity consumption, the cost of children is not the same as children's consumption. In this context, the cost of children to their parents is often described with a consumer equivalence scale. It is shown here that, under reasonable assumptions, children's consumption of market goods is less than the 'equivalent income' of the household, but more than the 'cost of children'. Expenditure costs, however, are only part of the cost of children. This paper uses a variant of the 'adult goods' method to estimate the full costs of children, including both expenditure and time costs. Adult personal time (comprising pure leisure, sleep and other personal care) is used as the adult good. Preliminary estimates using Australian data suggest a very large cost of children. The paper discusses the limitations of the estimation approach and considers the broader welfare implications of these costs.

Suggested Citation

  • Bruce Bradbury, 2004. "The Price, Cost, Consumption and Value of Children," Labor and Demography 0402003, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpla:0402003
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    References listed on IDEAS

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    2. Timothy Smeeding & Gunther Schmaus & Brigitte Buhmann & Lee Rainwater, 1988. "Equivalence Scales, Well-Being, Inequality and Poverty: Sensitivity Estimates Across Ten Countries Using the LIS Database," LIS Working papers 17, LIS Cross-National Data Center in Luxembourg.
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    8. 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.
    9. Pencavel, John, 1987. "Labor supply of men: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 1, pages 3-102, Elsevier.
    10. Bradbury, Bruce, 1994. "Measuring the Cost of Children," Australian Economic Papers, Wiley Blackwell, vol. 33(62), pages 120-138, June.
    11. Nelson, Julie A, 1988. "Household Economies of Scale in Consumption: Theory and Evidence," Econometrica, Econometric Society, vol. 56(6), pages 1301-1314, November.
    12. Laurence J. Lau, 1985. "The Technology of Joint Consumption," Palgrave Macmillan Books, in: George R. Feiwel (ed.), Issues in Contemporary Microeconomics and Welfare, chapter 16, pages 484-504, Palgrave Macmillan.
    13. Brigitte Buhmann & Lee Rainwater & Guenther Schmaus & Timothy M. Smeeding, 1988. "Equivalence Scales, Well‐Being, Inequality, And Poverty: Sensitivity Estimates Across Ten Countries Using The Luxembourg Income Study (Lis) Database," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(2), pages 115-142, June.
    14. repec:bla:revinw:v:34:y:1988:i:2:p:115-42 is not listed on IDEAS
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    Cited by:

    1. François Gardes & Imen Sayadi & Christophe Starzec, 2015. "The full equivalence scales: an estimation integrating the monetary and time dimensions of households’ expenditures [Les échelles d’équivalence complètes : une estimation intégrant les dimensions m," Post-Print hal-01307097, HAL.
    2. François Gardes & Imen Sayadi & Christophe Starzec, 2015. "Les échelles d’équivalence complètes : une estimation intégrant les dimensions monétaire et temporelle des dépenses des ménages," Revue d'économie politique, Dalloz, vol. 125(3), pages 393-414.
    3. Holly Sutherland & Christine Lietz & Horacio Levy, 2005. "Alternative Tax-benefit Strategies to Support Children in the European Union. Recent Reforms in Austria, Spain and the United Kingdom," Papers inwopa05/33, Innocenti Working Papers.
    4. François Gardes & Imen Sayadi & Christophe Starzec, 2015. "The full equivalence scales: an estimation integrating the monetary and time dimensions of households’ expenditures [Les échelles d’équivalence complètes : une estimation intégrant les dimensions m," PSE-Ecole d'économie de Paris (Postprint) hal-01307097, HAL.
    5. François Gardes & Imen Sayadi & Christophe Starzec, 2015. "The full equivalence scales: an estimation integrating the monetary and time dimensions of households’ expenditures [Les échelles d’équivalence complètes : une estimation intégrant les dimensions m," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01307097, HAL.
    6. François Gardes & Imen Sayadi & Christophe Starzec, 2013. "Les échelles d'équivalence complètes : une estimation intégrant les dimensions monétaire et temporelle des dépenses des ménages," Post-Print halshs-00940266, HAL.
    7. Garcia-Diaz Rocio, 2012. "Demand-Based Cost-of-Children Estimates and Child Poverty," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-32, January.
    8. repec:hal:pseose:hal-01307097 is not listed on IDEAS
    9. An-Chi Tung, 2011. "Consumption over the lifecycle: an international comparison," Chapters, in: Ronald Lee & Andrew Mason (ed.), Population Aging and the Generational Economy, chapter 6, Edward Elgar Publishing.
    10. Serhii Maksymovych & William Appleman & Zurab Abramishvili, 2023. "Parental gender preference in the Balkans and Scandinavia: gender bias or differential costs?," Journal of Population Research, Springer, vol. 40(4), pages 1-48, December.
    11. Zurab Abramishvili & William Appleman & Sergii Maksymovych, 2019. "Parental Gender Preference in the Balkans and Scandinavia: Gender Bias or Differential Costs?," CERGE-EI Working Papers wp643, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    12. Matthew Gray & David Stanton, 2010. "Costs of children and Equivalence Scales: A Review of Methodological Issues and Australian Estimates," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 13(1), pages 99-115.

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    Keywords

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    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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