Estimating the Cost of Children Through Engel Curves by Different Good Aggregates

ZASTOSOWANIA STATISTICS, MATHEMATICS AND ECONOMICS, Red. W. Ostasiewicz, ed., Wroclaw University of Economics, 2004

25 Pages Posted: 12 Feb 2005 Last revised: 8 Sep 2013

Abstract

Equivalence scales for the cost of children are estimated for one of the most developed Italian region (Lombardia) through the Engel approach. The data set is obtained from the survey on household consumption expenditures, which is hold by the Italian Central Institute for Statistics (ISTAT) in 1997, 1998, 1999 and 2000. The estimation of equivalence scales is not restricted to the share devoted to food. Besides the usual share of food and non-alcoholic beverages, 1w, we specify four further shares of necessities. The results obtained in this research show that in estimating equivalence scales through Engel curves it is very important to specify in control variables to take account for heterogeneity among families. Though the food share can still be a valid indicator to compare family welfare and then to estimate equivalence scales, in some situations it results to be misleading. The experiment of adopting broader good aggregates as indicators gives interesting results and more likely estimates in correspondence of some family typologies.

Keywords: Cost of children , Engel curves, Equivalence scales

JEL Classification: C21, D12, D31, D63

Suggested Citation

Vernizzi, Achille and Siletti, Elena, Estimating the Cost of Children Through Engel Curves by Different Good Aggregates. ZASTOSOWANIA STATISTICS, MATHEMATICS AND ECONOMICS, Red. W. Ostasiewicz, ed., Wroclaw University of Economics, 2004. Available at SSRN: https://ssrn.com/abstract=665501

Achille Vernizzi (Contact Author)

Università degli Studi di Milano ( email )

Via Conservatorio, 7
Milano, I 20122
Italy
++390250321460 (Phone)
++390250321505 (Fax)

No contact information is available for Elena Siletti

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