Fake Government Statistic: It Costs $241,000 to Raise a Child

The Tea Party Economist reports:

The U.S. Department of Agriculture issues this statistic every year. Reporters dutifully report it. There is no more misleading statistic that the government releases each year. It is clearly preposterous. It is never challenged by the media.

No one asks this: “Why should the USDA be gathering these statistics?” Food absorbs less than 20% of the typical household’s budget. The USDA is not an expert organization in anything else. This is what we call mission creep. A bureaucracy expands its jurisdiction and therefore also its budget.

Here is a typical example of the media’s dutiful gee-whiz reporting.

What’s wrong with this? First, attributing 30% to the cost of housing. If a family puts three boys on one bedroom, and three girls in a second bedroom, the cost per child will plummet.

In fact, the housing expense for children is close to zero. Here’s why. All costs are marginal, economic theory teaches. What is the cost of those extra rooms? Almost zero.

When childless couples buy a home, do they buy a one-bedroom home? No. They buy at least a two-bedroom home. Most of them buy a three-bedroom home. But if the average American family buys extra bedrooms for show, the marginal cost of having a child live in that bedroom is zero. This is basic economics.

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