Demand-based cost-of-children estimates and child poverty
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This paper compares alternative demand-based equivalence scales for the cost of children to assess child poverty in Mexico. The models estimated here range from single-equation models, such as those of Engel and Rothbarth, to a complete demand system approach with fixed price effects. The results found in this study favor the generalization of the complete demand system equivalence scales over the other models. Despite the differences in the alternative models, the ranking of households with children and overall populations is insensitive to different equivalence scales and poverty lines used. However, variation in the composition of poor households with children has a different effect depending on the particular choice of equivalence scale. We found that, for households with more than the country's average number of children, poverty incidence is considerably higher than in the population as a whole. Copyright © 2012 De Gruyter. All rights reserved.