1 Expenses include personal care items, entertainment, and reading materials.

Source: Dept. of Agriculture, Center for Nutrition Policy and Promotion,Expenditures on Children by Families, 1994, 1995, 1996, 1997, 1998, and 1999 annual reports.

http://www.usda.gov/cnpp/

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Categories of Household Expenditures

Housing expenses include shelter (mortgage interest, property taxes, or rent; maintenance and repairs; and insurance), utilities(gas, electricity, fuel, telephone, and water), and house furnishings and equipment (furniture, floor coverings, major appliances,and small appliances). It should be noted that for homeowners, housing expenses do not include mortgage principal payments;such payments are considered in the CE to be a part of savings. So total dollars allocated to housing by homeowners areunderestimated in this report.

Food expenses include food and nonalcoholic beverages purchased at grocery, convenience, and specialty stores, includingpurchases with food stamps; dining at restaurants; and household expenditures on school meals.

Transportation expenses include the net outlay on purchase of new and used vehicles, vehicle finance charges, gasoline andmotor oil, maintenance and repairs, insurance, and public transportation.

Clothing expenses include childrens apparel such as diapers, shirts, pants, dresses, and suits; footwear; and clothing servicessuch as dry cleaning, alterations and repair, and storage.

Health care expenses include medical and dental services not covered by insurance, prescription drugs and medical supplies notcovered by insurance, and health insurance premiums not paid by employer or other organization.

Child care and education expenses include day care tuition and supplies; baby-sitting; and elementary and high school tuition,books, and supplies.

Miscellaneous expenses include personal care items, entertainment, and reading materials.

*Methods

Data used to estimate expenditures on children arefrom the 1990-92 Consumer Expenditure Survey--Interview portion (CE). Administered by the Bureauof Labor Statistics (BLS), U.S. Department of Labor,this survey is the most comprehensive source ofinformation on household expenditures available atthe national level. The sample consists of 12,850husband-wife households and 3,395 single-parenthouseholds and was weighted to reflect the U.S.population of interest, using BLS weighting methods.

Multivariate analysis was used to estimate house-holdand child-specific expenditures, controlling forincome level, family size, and age of the younger childso estimates could be made for families with thesevarying characteristics (regional estimates were alsoderived by controlling for region). Households with twochildren were selected as the base since this was theaverage number of children in two-parent families.Estimated household and child-specific expendi-tureswere allocated among family members. Sincethe estimated expenditures for clothing, child care, andeducation only apply to children (adult-related expensesfor these items were excluded), allocations of theseexpenses were made by dividing the estimates equallyamong the children.

The 1994 food plans of USDA were used to allocatefood expenses among family members. These plans,derived from a national food consumption survey, showthe share of food expenses attributable to individualfamily members by age and household income level.These member food budget shares were applied toestimated 1990-92 household food expenditures todetermine food expenses on a child. Similarly, healthcare expenses were allocated to each family memberbased on budget share data from the 1987 NationalMedical Expenditure Survey. This survey contains dataon the proportion of health care expenses attributableto individual family members. These member budgetshares for health care were applied to estimated 1990-92household health care expenditures to determineexpenses on a child.

Unlike food and health care, no research baseexists for allocating estimated household expenditureson housing, transportation, and other miscellaneousgoods and services among family members. USDAuses the per capita method in allocating theseexpenses; the per capita method allocates expensesamong household members in equal proportions. Amarginal cost method, which assumes that expendi-tureson children may be measured as the differencein total expenses between couples with children andequivalent childless couples, was not used becauseof limitations with this approach. The marginal costmethod depends on development of an equivalencymeasure for which there is no established base. Variousmeasures have been proposed, with each yieldingdifferent estimates of expenditures on children. Also,some of the marginal cost approaches do not considersubstitution effects. They assume, for example, thatparents do not alter their expenditures on themselvesafter a child is added to a household.

As transportation expenses resulting from workactivities are not related to expenses on children, thesecosts were excluded when estimating childrens trans-portationexpenses. The overall USDA methodologywas repeated for families with one child and more thantwo children so adjustments may be made for familiesof different sizes.

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