A novel way of measuring the endowment effect of gaining a child

Abstract

We test, using national survey data on Filipino women, whether stated fertility preferences are stable and, thus, reliable measures of choice. We compare the expressed ideal number of children of two groups of matched women with that of another group having arguably more stable preferences. Using propensity score matching, we find that the stated ideal number of children is significantly higher than the control group with presumed stable preferences, by about 1 child among the poor and among older women. This difference suggest instability in fertility preferences, which may be due to moving fertility targets, cognitive dissonance or anomalous choice behavior arising from status-quo bias, or endowment effects, with the prohibitive cost of “giving up” additional children causing an upward adjustment of fertility targets.

JEL classification : J13, I12, D13