Poverty and household size

The widely held view that larger families tend to be poorer in developing countries has influenced research and policies. But the basis for this"stylized fact"is questionable, the authors argue. Widely cited evidence of a strong negative correlation between size and consumption per person is unconvincing, given that even poor households face economies of size in consumption. The authors find that the correlation between poverty and household size vanishes in Pakistan when the size elasticity of the cost of living is about 0.6. This turns out to be the elasticity implied by a modified version of the food-share method of setting scales. By contrast, some measures of child nutritional status indicate an elasticity closer to unity. Consideration of the weight attached to child versus adult welfare may help resolve the nonrobustness of demographic profiles of poverty. The authors show that the incidence of severe child stunting is more elastic to household size than their Engel curve estimate suggests, although the latter is still a fair predictor of child wasting. A consideration of the purpose of measuring poverty - notably the extent to which it is used to inform policies aimed at promoting child welfare - may go some way toward resolving the issues.Poverty Lines,Poverty Assessment,Economic Theory&Research,Environmental Economics&Policies,Inequality

Household Size Economies: Malaysian Evidence

People live in households with different size and composition and they consume a variety of goods; categorised as private and public goods. With the existence of public goods in the household, doubling the household size need not increase the consumption expenditure twofold to maintain the same standard of living. Using households’ per capita expenditure from the Household Expenditure Survey 2004-2005, we estimate the household size economies indices for household consumption goods through the Seemingly Unrelated Regression. The results suggested that the lower income households enjoy savings from a wider range of public goods compared to the higher income households.Household size economies, Seemingly Unrelated Regression, household composition, public goods, Malaysia.

Why does the Engel method work? Food demand, economies of size and household survey methods

Estimates of household size economies are needed for the analysis of poverty and inequality. This paper shows that Engel estimates of size economies are large when household expenditures are obtained by respondent recall but small when expenditures are obtained by daily recording in diaries. Expenditure estimates from recall surveys appear to have measurement errors correlated with household size. As well as demonstrating the fragility of Engel estimates of size economies, these results help resolve a puzzle raised by Deaton and Paxson (1998) about differences between rich and poor countries in the effect of household size on food demand

State Estimates of Median Household Size-Adjusted Income for Persons with Disabilities: Report Summary

Since 1980, the growth in the median household size-adjusted income of Americans with a disability has fallen below that of the rest of the working population overall and in the vast majority of states. Knowledge of state-specific trends in the relative household income rate of people with disabilities compared to the rest of the working population can be of assistance to state and federal policy makers and disability advocates. Such information can help track comparisons over time to assess the impact of policy and economic interventions to address such disparities. A recent report from the Cornell University Rehabilitation Research and Training Center (RRTC) for Economic Research on Employment Policy for Persons with Disabilities uses data from the March Current Population Survey (CPS) to estimate median household size-adjusted income for persons with and without a disability in the non-institutionalized working-age (aged 25 through 61) civilian population in the United States, and for each state and the District of Columbia for the years 1980 through 1998. The median household size-adjusted income of persons with a disability relative to those of persons without a disability are found to vary greatly across states. (The relative median household size-adjusted income is the median household size-adjusted income of those with disabilities as a percentage of the median household size-adjusted income of those without disabilities. The larger this number is, the closer are the median household size-adjusted incomes of those with and without disabilities.

Confronting the Representative Consumer with Household-Size Heterogeneity

Much analysis in macroeconomics empirically addresses economy-wide incentives behind consumer/investment choices by using insights from the way a single representative household would behave. Heterogeneity at the micro level can jeopardize attempts to back up the representative consumer construct with microfoundations. One complex aspect of micro-level heterogeneity is household size, as individuals living in multi-member households have the potential to share goods within the household, benefiting from household-size economies. Theoretically, we show that validating the role of a representative consumer would require that the way individuals benefit from intra-household sharing is strictly aligned across the rich and the poor: once expenditures for subsistence needs are subtracted from disposable household income, household-size economies the remainder (discretionary) household incomes entail must be the same across the rich and the poor. We have designed a survey method that allows the testing of this stringent property of intra-household sharing and find that it holds.Linear Aggregation, Equivalent Expenditures, Survey Method, Household-Size Economies

How does the household structure shape the urban economy?

Households in real cities are heterogeneous regarding their size and composition. This implies that the household structure -i.e. the (average) household size, the composition, the relative share of different household types, and the number of households - differs across cities. This aspect is usually neglected in urban models used to study economic and policy issues that arise in today's cities. Furthermore, the household structure might change over time. For instance, over the last decades average household size has decreased in many countries. Several implications of this change have been discussed, but usually not in regard to an urban economy with its interdependencies. We develop an applied urban general equilibrium model which explicitly takes the household structure into account and thus allows studying the impacts of changes in the household structure on an urban economy and its spatial pattern. The paper shows that changes in the household structure affect an urban economy in various ways and may contribute to explain economic and spatial effects on cities. Compared to a 'Base City' which reflects the actual household structure in the United States, urban labor force participation, housing demand, rents, wages as well as urban commuting and shopping patterns are considerably affected by, e.g., changes in the average household size in a city. For instance, wage inequality between differently skilled workers rises and extreme cross commuting drops to almost zero when the city turns into a pure 'Singles City'. --General equilibrium,Household structure,Household size,Location,Commuting

Impact of Children on Household Savings in the Philippines

Household savings are important indicators of family welfare, not only in terms of a household's investment and income generation prospects, but also, and perhaps more importantly--given pervasive borrowing constraints and limited social security coverage--in terms of its ability to secure protection from income shortfalls. This article examines the relationship between household savings and family size. It also provides descriptive and multivariate evidence on the relationship of household savings and family size. It likewise uses a recent nationally representative household survey in the analysis. The results show that, on average, the impact of additional children on household savings is both negative and regressive.Philippines, family size, household savings

Does Measurement Error Explain a Paradox About Household Size and Food Demand? Evidence from Variation in Household Survey Methods

Several recent papers report a puzzling pattern of food demand falling as household size rises at constant per capita expenditure, especially in poorer countries. This pattern is contrary to a widely used model of scale economics. This paper exploits within-country differences in household survey methods and interviewer practices to provide a measurement error interpretation of this puzzle. A comparison of household surveys in Cambodia and Indonesia with the results from Monte Carlo experiments suggest that food expenditure estimates from shorter, less detailed recall surveys have measurement errors that are correlated with household size. These correlated measurement errors contribute to the negative effect of household size on food demand and cause upward bias in Engel estimates of household scale economies.Food demand, Economies of scale, Household surveys, Measurement error, Consumer/Household Economics, Demand and Price Analysis,

Impact of Children on Household Savings in the Philippines

Household savings are important indicators of family welfare, not only in terms of a household's investment and income generation prospects, but also, and perhaps more importantly--given pervasive borrowing constraints and limited social security coverage--in terms of its ability to secure protection from income shortfalls. This article examines the relationship between household savings and family size. It also provides descriptive and multivariate evidence on the relationship of household savings and family size. It likewise uses a recent nationally representative household survey in the analysis. The results show that, on average, the impact of additional children on household savings is both negative and regressive.Philippines, family size, household savings