On Measuring Child Costs: With Applications to Poor Countries

The theoretical basis for measuring child costs is discussed, and detailed consideration is given to two straightforward procedures for calculation, Engel's food share method and Rothbarth's adult good method. Each of these methods embodies different definitions of child costs so that the same empirical evidence can generate quite different estimates depending on the method used. It is shown that true costs are generally overstated by Engel's method and understated by Rothbarth's procedure, although the latter, unlike the former, can provide a sensible starting point for cost measurement. Our estimates from Sri Lankan and Indonesian data suggest that children cost their parents about 30-40 percent of what they spend on themselves.