Improving the measurement of child welfare in the context of intra-household inequality

This study aims to illustrate how to improve the evaluation of child economic well-being and child poverty using the collective approach. International organisations such as the World Bank, OECD and UNICEF have made important efforts in recent years to produce reliable data and to measure poverty according to the most relevant items of household consumption baskets. However, when measuring poverty, it is common practice to assume either that resources are distributed equally within the household or that there are fixed equivalence scales (for example, a child can be counted as 0.5 adults). The methodology based on collective models of consumption overcomes this rigidity by allowing inequality within each household to be taken into account. The method assumes that each household devotes a fraction of resources to children, which can be estimated using the observed expenditure on child-exclusive goods. An example of how child poverty measures can be inaccurately estimated is illustrated through the case of young children in Albania.