The Changes of Cost of Children for Turkey by Using Income-Dependent Equivalence Scales

This study aims to estimate the cost of children in Turkey by using equivalence scale approach for different income levels and suggests a new commodity composition for Muslim countries. We used 2003, 2007 and 2014 household budget survey micro data set. According to the calculations of Engel equivalence scales, the cost of children decreases from 2003 to 2014 in Turkey. Since the data of 2007 is determined as reasonable consumption behaviours of Turkish households, the inequality and poverty researches can use equivalence scales calculations of 2007. If anyone wants to estimate Rothbarth equivalence scales for a Muslim country, using of “adult goods” which is defined as “expenditures of alcohol, tobacco, adult cloths and adult shoes” in literature would not be suitable. This study suggests “a new commodity group” which is “furnishing and communication”. The Engel model estimations are significant for households who are at the middle and high income level whereas the results of Rothbarth model estimations are found as significant for low and middle income groups. As a result, we recommend to use equivalence scales estimations’ results for middle income groups in the inequality and poverty researches, since this group is free from irregular expenditure behaviors and gives significant estimations for both models.