What Is The Income "Cost Of A Child"? Exact Equivalence Scales For Canadian Two-Parent Families

Shelley Phipps

The Review of Economics and Statistics, 1998, vol. 80, issue 1, 157-164

Abstract: This note asks: "How much income does it take to preserve the prechild standard of living for all members of the postchild household?" Equivalence scales for Canadian two-parent families are estimated using a complete demand system approach and imposing the condition of equivalence scale exactness/independent of a base (Blackorby and Donaldson (1993), Lewbel (1989)). This approach has several advantages: (1) It is formally grounded in economic theory. (2) The income required for children can be estimated without ignoring the well-being of the children themselves. (3) The estimates obtained appear reasonable relative to others currently available in the literature. © 1998 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Date: 1998
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