Economic literature suggests adopting the equivalence scale in order to calculate the private monetary cost of a child. This estimation is based upon controversial assumptions about exogeneity of fertility choice, identical preferences and possibility of welfare comparisons. In this paper we propose a different approach for estimating the cost of children. This method does not require household welfare comparisons and assumptions about preferences. Using the 1997 Italian Household Budget survey, we estimate the increase in the total expenditure caused by the presence of an additional child for household with equal income and socio-economic characteristics. The monthly marginal cost is equal to 9% for household with average income.
Il costo dei figli: una stima svincolata dal benessere.
POLIN, Veronica
2004-01-01
Abstract
Economic literature suggests adopting the equivalence scale in order to calculate the private monetary cost of a child. This estimation is based upon controversial assumptions about exogeneity of fertility choice, identical preferences and possibility of welfare comparisons. In this paper we propose a different approach for estimating the cost of children. This method does not require household welfare comparisons and assumptions about preferences. Using the 1997 Italian Household Budget survey, we estimate the increase in the total expenditure caused by the presence of an additional child for household with equal income and socio-economic characteristics. The monthly marginal cost is equal to 9% for household with average income.
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