When there is a large number of children in a household, there can be diseconomies in scale due to the extra costs of upgrading to large houses and cars (or second cars).Įstimates of the cost of a child generally tend to increase with the age of the child. This is due to economies of scale resulting from hand-me-downs and shared infrastructure (such as bedrooms and furniture). The cost of the first child is often found to be greater than that for each subsequent child. Such households, for example, are more likely to pay for private education, buy brand name clothes and go on expensive holidays. Higher income households have greater living standards, which children share. The cost of raising a child increases with household income, although the rate of increase in the estimated cost generally declines with income level. There is no fixed or absolute cost of a child. Australian Costs of Children Research – An Overview 2.1. They are also presented in annual dollar amounts (for the June quarter 2004) and as a percentage of household disposable and taxable incomes. Costs are presented as gross costs, that is before receipt of relevant government benefits. Section five, the key section reports the costs of children in couple households, in sole parent households, and for non-resident parents exercising regular contact or shared care. Section four discusses the main items of expenditure in each of the 10 components making up the costs of raising children. The report then explains how the cost estimates presented in this report have been calculated using the budget standards methodology. The report begins with an overview of Australian costs of children research, and the relative merits of the different methodological approaches to estimating these costs.
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