Since household incomes have risen over the last 1oo years and stds of living have increased, but there has been a decline in children. Does this indicate that children are an inferior good?
Yes.
http://economics.about.com/cs/economicsglossary/g/inferior_good.htm
Thanks. I am a bit confused though. To me it seems that children can be either a normal good or inferior depending on the situation. Are you saying that Malthusians model of fertility is no longer valid?
Children become an inferior good when the number of births per woman declines.
To determine whether children are considered an inferior good, we need to understand the concept of inferior goods and consider various factors that influence the declining birth rates despite rising incomes and standards of living.
Inferior goods are those whose demand decreases as income rises. These goods are often seen as lower-quality substitutes for more desirable alternatives. As income increases, people tend to shift their consumption towards superior or more preferred goods, causing the demand for inferior goods to decrease.
When examining the declining birth rates despite rising incomes and standards of living, there are several factors to consider:
1. Opportunity Costs: As standards of living increase, individuals may have higher earning potential and career aspirations. Having children often requires time, resources, and attention, which may be seen as opportunity costs for pursuing other personal or professional goals.
2. High Costs of Child-Rearing: Raising children can be expensive, including costs associated with education, healthcare, and general living expenses. As income rises, individuals may be more cautious about the financial implications of having children and may choose to limit family size.
3. Changing Social Norms: Societal and cultural norms regarding family size, gender roles, and responsibilities have evolved over time. Factors like increased gender equality, greater emphasis on individualism, and changes in traditional family structures can contribute to declining birth rates.
4. Increased Access to Birth Control and Family Planning: Advances in contraception, reproductive healthcare, and family planning methods have provided individuals with greater control over reproductive choices. This increased control can lead to a deliberate decision to have fewer children, even with rising incomes.
Considering these factors, the decline in birth rates despite rising incomes and standards of living does not necessarily imply that children are an inferior good. Rather, it reflects a complex interplay of economic, social, and cultural factors influencing personal choices related to family size.