Econometrica: Jan 1980, Volume 48, Issue 1
Testing the Quantity-Quality Fertility Model: The Use of Twins as a Natural Experiment
Kenneth I. Wolpin, Mark R. RosenzweigThe predictive content of the quantity-quality model of fertility is analyzed and the empirical information required for verification under a minimal set of restrictions on the utility function is described. It is demonstrated that commodity-independent compensated price effects must be known to infer the existence of the unobservable interdependent shadow prices of the model with a relatively weak structure imposed on preference orderings. A method of using multiple birth events to substitute for these exogenous prices is proposed and applied to household data from India.
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