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

34 Pages Posted: 28 Dec 2009

See all articles by Olivier Bargain

Olivier Bargain

IZA Institute of Labor Economics; University College Dublin (UCD)

Olivier Donni

University of Cergy-Pontoise - THEMA; IZA Institute of Labor Economics; Centre Interuniversitaire sur le risque, les politiques économiques et l'emploi (CIRPÉE)

Abstract

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.

Keywords: consumer demand, collective model, Rothbarth method, cost of children, scale economies, equivalence scales, indifference scales

JEL Classification: D11, D12, C30, D36, I31, J12

Suggested Citation

Bargain, Olivier and Donni, Olivier, The Measurement of Child Costs: A Rothbarth-Type Method Consistent with Scale Economies. IZA Discussion Paper No. 4654, Available at SSRN: https://ssrn.com/abstract=1528589

Olivier Bargain (Contact Author)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
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Germany

University College Dublin (UCD) ( email )

Belfield, Dublin 4 4
Ireland
+353 1 716 8357 (Phone)
+353 1 283 0068 (Fax)

HOME PAGE: http://www.ucd.ie/economics/staff/obargain/obargain.htm

Olivier Donni

University of Cergy-Pontoise - THEMA ( email )

33 boulevard du port
F-95011 Cergy-Pontoise Cedex, 95011
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre Interuniversitaire sur le risque, les politiques économiques et l'emploi (CIRPÉE) ( email )

Pavillon De Sève
Ste-Foy, Quebec G1K 7P4
Canada

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