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UCD Geary Institute Research, Analysis, Evidence

UCD Geary Institute Research, Analysis, Evidence.

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UCD Geary Institute Research, Analysis, Evidence

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  1. UCD Geary InstituteResearch, Analysis, Evidence CHILDREN AS CONSUMERS:INVESTIGATING CHILD DIARY EXPENDITURE DATALisa Farrell* and Michael A. Shields*School of Economics, University College Dublin, Ireland** Department of Economics, University of Melbourne, AustraliaWe are grateful to the Data Archive, University of Essex, for supplying the Family Expenditure Survey data.

  2. The Child as a consumer why do we care? • Small component of national income – but a substantial proportion of the demand for certain industries • Adult expenditure patterns may be effected by expenditure as a child • Interaction with household expenditure • Welfare implications for children

  3. Our Focus • Determinants of child expenditure patterns • Child income • Child characteristics • Parent and sibling characteristics • Household characteristics • Household expenditure patterns

  4. The data • FES 1997-98 • 90% response rate • 1789 children • Aged 7-15 • Average weekly expenditure £11.14

  5. What do they buy?

  6. The model- what they buy • Multivariate Probit Model • E is a 0/1 indicator

  7. The model- how much they buy • Budget share equations for commodity i for child j • Almost Ideal Demand System (AIDS)

  8. Results discussed- what they buy • Older children buy less child-orientated commodities, such as toys. • Boys have a lower probability of buying clothes and books than girls. • Lone parent children have a higher probability of buying vice type products and are more likely to buy travel products. • Children from wealthy households also have a higher probability of consuming vice products

  9. Results- how much they buyThe effect of income

  10. Results- how much they buyThe effect of household provision

  11. Results discussed-how much they buy • The effect of income • drinks, sweets, books, toys are normal goods • clothes, travel and vice are luxury goods • The effect of household provision • Higher parental budget share= higher child budget share • Suggesting intergenerational transfer of preferences

  12. Conclusion • A first attempt to understand children as consumers…some data issues • Child income data is poor (under-recorded relative to expenditure) • Child work info is poor- paper rounds etc. • Better breakdown for high technology products purchase of music from the internet and mobile phone credit etc.

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