Calculating A Price Index For Families With Children: Implications For Measuring Trends In Child Poverty Rates

This paper investigates the effects of varying consumption patterns for families with and without children on measured trends in child poverty. We first use data from consumer expenditure surveys to calculate price indices by family type. We next examine the effect of using these group‐specific price indices on measured trends in child poverty. Although we find that, all else equal, children increase the cost of living, our calculations indicate that on average families with children experienced relatively lower inflation rates than families without children during the 1968 to 1987 period. While this result suggests that estimates of child poverty rates calculated using an average price index may have over‐stated secular increases in child poverty, we find that child poverty rates calculated using a price index specific lo families with children are not substantively different from those calculated using an average index for all families.