Textbook Notes (376,276)
CA (165,932)
Ryerson (11,431)
ECN (938)
ECN 340 (22)
Chapter 5

Chapter 5

3 Pages
25 Views

Department
Economics
Course Code
ECN 340
Professor
Thomas Barbiero

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Description
 Children are a source of consumption  Children are an object of investment Children as an Economic Good  Parents get companionship  Someone to talk to, take a walk with  Parents enjoy being respected & adored  Children being PLEASURE  In the past children = Old Age Plan (Having children just to have someone to rely on when older)  In the past insurance not well developed, therefore, children were an insurance policy  Why can child be a “bad” insurance policy? » Could decide when older that they don’t want to look after their parent  Children (were) can be an important source of labour- especially if they are less expensive than machines!  Parents buy immortality (the ability to live forever; eternal life) with children  Some parents live through their children; they get vicarious satisfaction. Ex. parents get satisfaction through child if they didn’t go to University and their child does. Ex. One tree Hill Dan Scott & Nathan & bball  Parents that get a great amount of benefit from children will produce more of them (ceteris paribus) Cost of Children Family expenditure on  Giving birth  Food  Entertainment  Medical expenses  Clothing  Shelter  Insurance  Education  Transportation  Emotional drain Birth  Time $3000rents (Largest Rearing $65 000 University $24 000 Parents’ time $374 000 Total $466 000 Lower income family has lower costs Higher income family has higher costs Demand and Supply of Children  Child comes with OWN WILL, therefore always possible surprises  Cannot send one back! Even after you are tired of him/her  Some children are “accidents” demand is downward sloping Demand Total Demand is influenced by:  Taste (ceteris paribus)  Prices of goods- cars, houses, vacations, etc. (ceteris paribus)  Income (ceteris paribus)  Over time, preferences may turn from quantity to quality  Quality requires more investment  Anything that brings down the cost of r
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