The Child as a Family Asset? The Modelling of the Family' Economic Loss in Case of Premature Child Death

Ilona Kwiecień , Anna Jędrzychowska

Abstract

Purpose: EU policy investing in children involves a social assessment of the high value of household spending on having and bringing up children. Therefore, the question arises as to what loss the household as investor will bear in the event of the child's death, and what the economic value of the child. The research questions are as follows: How to assess the economic importance, economic value of a child in a household? What factors influence this economic value? Is it necessary to model it in time? Design/Methodology/Approach: We present the loss suffered by a household as a result of a child's death, based on selected economic theories and concepts for estimating human life and goods, assuming the child is a good of a given value. We build the model using financial mathematics, discounted cash flow calculations, annuity calculations, as well as social elements and intergenerational transfers. Findings: The obtained results indicate the high economic value of the child for the current, but also - and even the most - the future economic situation of the household. The compensatory awards in liability cases do not cover even the expenses incurred for the lost asset. It may lead to financial instablity of individual and externalisation of loss, especially when it comes to support during old age. Practical Implications: The modelling concept could determine the minimum economic and ethical value of the child from the point of view of the household and allow evaluation in the financial decisions and loss compensation instruments areas, such as life insurance, liablity claims or the systemic policy of supporting fertility and investing in children. Originality/Value: The study offers an in-depth insight into modelling of the household financial loss and valuation of the child.
Author Ilona Kwiecień (E&F / DI)
Ilona Kwiecień,,
- Department of Insurance
, Anna Jędrzychowska (E&F / DI)
Anna Jędrzychowska,,
- Department of Insurance
Journal seriesEuropean Research Studies Journal, ISSN 1108-2976, (N/A 100 pkt)
Issue year2020
Vol23
No2
Pages98-120
Publication size in sheets1.1
Keywords in EnglishEconomic loss, family behaviour, household finance management, child value
ASJC Classification1400 General Business, Management and Accounting; 2000 General Economics, Econometrics and Finance
DOIDOI:10.35808/ersj/1582
Languageen angielski
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Kwiecien_I_Jedrzychowska_A_The Child_as_a_Family_Asset.pdf 415,08 KB
Score (nominal)100
Score sourcejournalList
Publication indicators Scopus SNIP (Source Normalised Impact per Paper): 2018 = 2.169
Citation count*
Additional fields
UwagaThe project is financed by the Ministry of Science and Higher Education in Poland under the programme "Regional Initiative of Excellence" 2019 - 2022 project number 015/RID/2018/19 total funding amount 10.721.040,00 PLN
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* presented citation count is obtained through Internet information analysis and it is close to the number calculated by the Publish or Perish system.
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