Is there a relative price effect of children?
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This paper tests for the relative price effect of children using data from the Russian Longitudinal Monitoring Survey (RLMS). The relative price effect is defined as the change in expenditure on a certain consumption item when children arrive, after controlling for changes in household income and other demographic variables. Unlike previous works which either use cross-sectional data with disaggregated consumption items, or panel data with aggregated consumption items, this paper contributes to the literature by finding the effect of new children on expenditure on a variety of disaggregated consumption items for a panel of households. After controlling for household fixed effects, we do not find evidence on the relative price effect on most consumption items. This finding is due to either 1) the effect is unimportant, or 2) the effect is present, but is weakened by large measurement errors in the consumption and income variables.
CONF
Asia-Pacific Economic Association (APEA) Conference 2006
Stepanova, Ekaterina
Tsang, Kwok Ping
2005
University of Washington, Seattle
1911
