| Abstract: | This study examines the effect of children on family consumption decisions during different stages of the life cycle. An empirical model that incorporates both continuous measures of adult equivalence and a flexible functional form is used. Results indicate that durables, food eaten (purchased) away from home, and adult clothing are luxury goods for two-child families. Economies of scale are noted for food and shelter expenditures. Two-child families substitute out of expenditures for meals eaten away from home, adult clothing, and other goods and services to meet increased demand due to the children's presence. |
