Carroll, Wilkinson, and Four Demand Curves
By Bryan Caplan
WSJ.com now features my target essay on my parental odyssey, replies by Laura Carroll and Will Wilkinson, and my replies to their replies. I successfully suppressed my urge to send a bunch of demand curves to the WSJ. But I thought EconLog readers might appreciate them.
The essence of my argument comes down to this:
In her reply, Laura Carroll raises the following objection:
Mr. Caplan’s thinking suggests that if I am contemplating whether I
want children or should have another one, learning that it can be
easier than I thought should swing the pendulum to “yes.” It assumes
that I do want a child–or more of them–but that I am letting worries
about the demands of parenting stop me. When contemplating having
children, we don’t all start with “I want them, but…” A growing number
of people know the experience of parenthood is not for them, “serene”
parenting option or not.
My response is that Carroll simply has an unusual demand curve. Apparently hers is vertical at Quantity=0, so it overlaps the y-axis:
That’s fine. I respect her preferences. But she ought to admit that she’s atypical. As I put it:
[M]ost people do feel some desire to be a parent. Many parents feel some desire to have another child. I’m directing my advice to them.
One of Will Wilkinson’s main challenges is best expressed graphically, too. Will’s words:
Suppose I’ve got my eye on a certain hi-definition television set. I
think it costs $1,000, which is exactly what I’ve got to spend. Then I
discover it’s on sale for $900. Should I buy two? Three? Should I take
the hundred bucks I saved and put it toward more TVs? I suspect Mr.
Caplan’s “just relax” child-rearing advice amounts to something in the
neighborhood of a hundred bucks off a thousand-buck TV. It’s a good
deal, but not nearly good enough to get you to buy more TVs, or kids,
than you thought you wanted.
My graphical representation of Will’s words:
Will’s story has to be far more common than Laura’s. He’s right to point out that kids are a step good; the straight line in my first graph is a simplification. Nevertheless, there’s every reason to think that, on average, demand for step goods remains sensitive to price. As I explain:
Kids, like TVs, come in whole numbers. You can’t have 1.3 kids or
2.7 TVs. For such goods, changing prices often fail to change an individual’s behavior. But changing prices can still have a large effect on average behavior. When stores cut the price of HDTVs by 10%, they sell a lot more. That’s why they have sales.
Similarly: If 10% of the people who bought my arguments decided to
have one extra child, I’d call that a big effect – even though 90% left
their family size unchanged.
Graphically, I’m saying that even if most demand curves look like the one above, there are still plenty that look like this: