What is the Income “Cost of a Child”? Exact Equivalence Scales for Canadian Two-Parent Families
The Review of Economics and Statistics
1998
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 equiva-lence 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.
- DOI
- 10.1162/003465398557267
- Volume
- 80 (1)
- Pages
- 157-164
- Language
- en
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