The price, cost, consumption and value of children

Though they are related, the price, cost, consumption and value of children are not the same. In this paper Bruce Bradbury explores two aspects of the relationship between these concepts. Even if we restrict attention to the domain of commodity consumption, the cost of children is not the same as children\u27s consumption. In this context, the cost of children to their parents is often described with a consumer equivalence scale. It is shown here that, under reasonable assumptions, children\u27s consumption of market goods is less than the \u27equivalent income\u27 of the household, but more than the \u27cost of children\u27. Expenditure costs, however, are only part of the cost of children. This paper uses a variant of the \u27adult goods\u27 method to estimate the full costs of children, including both expenditure and time costs. Adult personal time (comprising pure leisure, sleep and other personal care) is used as the adult good. Preliminary estimates using Australian data suggest a very large cost of children. The paper discusses the limitations of the estimation approach and considers the broader welfare implications of these costs