- Thomas Espenshade published an economic study in 1984 called ‘Investing in Children: New Estimates of Parental Expenditures.
- The purpose of the study was parent education and policy formation, including child support guidelines
- Funded by U.S. National institute for Child Health and Development
- It was the first study used by Incomes Shares model. It was based on Engel methodology with 1972 CES data using marginal cost approach.
- It was widely used by states when the guidelines became mandatory in 1989.
- Since then, experts have questioned the validity of it because there is no relationship between child expenditures and income
- Eight states still use it (Alaska, Florida, Indiana, Kentucky, Michigan, New Hampshire, Texas, and Washington.
- Out of eight states, seven of them use Income Shares model
- There has been constant criticism of Espenshade’s work. Most notable is is a report written in 2002 by Dr. Ralph Frasca, a PHD Economist and professor of Economics in the Department of Economics at the University of Dayton in Dayton, Ohio.