Mismeasured Household Size and its Implications for the Identification of Economies of Scale

We consider the possibility that demographic variables are measured with errors which arise because household surveys measure demographic structures at a point-in-time, whereas household composition evolves throughout the survey period. We construct and estimate sharp bounds on household size and find that the degree of these measurement errors is non-trivial. These errors have the potential to resolve the Deaton-Paxson paradox, but fail to do so. Copyright (c) Blackwell Publishing Ltd and the Department of Economics, University of Oxford, 2009.