Childrens Goods and Expenditure-Dependent Equivalence Scales David Donaldson and Krishna Pendakur University of British Columbia and Simon Fraser University corresponding author: pendakur@sfu.ca February 4, 2005 Abstract This note is to correct an error in Donaldson and Pendakur (2004) in this Journal. In "Equivalent-expenditure functions and expenditure-dependent equiv- alence scales", we propose equivalence scales which are log-linear in expenditure and show that they are identiable from behaviour under the maintained assump- tion of log-linearity. In the empirical work, we nd the equivalence scales for families in comparison with single childless adults to be declining in expenditure. Equivalence scales which vary with expenditure allow expenditure-shares for chil- drens goods to depend on expenditure, and in the empirical work, we nd the expenditure-share equation for childrens clothing to be declining in expenditure. In the empirical work, we estimated a 10-good quadratic almost ideal demand system over 60 price regimes to recover equivalence scales wherein one of the goods was childrens clothing. Unfortunately, we have since discovered that the childrens clothing data are only comparable for the rst 45 price regimes in the data. In particular, in the data for the rst 45 price regimes, childrens clothing is dened as clothing for children aged less than 14, but in the data for the last 15 price regimes, it is dened as clothing for children aged less than 4. To assess the importance of this error, we estimated two new demand systems: (1) a 9- good demand system which is identical to the original except that clothing for adults and clothing for children are pooled into a single good called clothing; 1