The economics of parenthood

Joshua Gans seems like a regular family bloke till you look at the way he has brought up his three kids. The economics professor applied economic principles to his child rearing. Did it work?  Was it cruel? It certainly was unconventional and amusing at times. Here is an excerpt from his recently published book Parentonomics.

There is little that taxes a parent's energy like toilet training. If a child reads a year later, it usually doesn't affect much. But taking a year longer to learn how to go to the toilet is very costly. 

Even aside from the obvious costs of nappies and various cleaning routines, there comes a time when a parent feels enough is enough (usually somewhere around the 6000th nappy change). After attending to your child's personal waste for years, you feel it is time for some independence. 

So begins a discussion of the plan, the timeline and the incentives. Even if you somehow delude yourself that you don't need incentives, your child generally has other ideas. It is all much easier said than done.

Toilet training is an exercise in behaviour modification: you try to convince an otherwise happy and contented child that they have to take responsibility for their own actions - namely toileting. It is a classic situation where the interests of one party (the parents) differ from those of the other (the child). If you want to align those interests, someone is going to have to pay up. The only question is, how much? What reward do you need to offer to get the behaviour you want?

Enter our eldest child. Despite my economics background, we decided that, initially, we would bid low and see if we could get away with it. We thought we would appeal to some broad, vague sense that it would be good to grow up and wouldn't that be 'exciting'. Not surprisingly, those claims had about the same impact as calls for whiter, brighter towels or peace on Earth or what have you.

So it wasn't long before the price started to rise. But how do you engage in shameless bribery with a two-year-old? There isn't a lot to work with there. While money can appeal by about the age of eight, for the younger ones you have to appeal to a base motive. All we could think of was food; in particular, 'special' food.

It was fortunate that we had decided at some earlier point - several weeks earlier - to make a distinction between your general food (food that we would always allow our daughter to have) and special food (food that we would virtually never allow her to have). Into the former category fell rice cakes, fruit, yogurt, chicken and all vegetables. Into the latter category fell just about everything else. So now we had lots to work with. But here's a hint for the unprepared: engage in some pre-training deprival. It creates its own reward.

We decided to begin with jelly beans. The basic reward was to give out jelly beans for successful toileting behaviour. You got one or two jelly beans depending upon what you did, with one for … and I'm sure you can guess the rest.

But the whole scheme went further. You see, the jelly bean may be the reward, but game theory teaches us that unless the 'incentive contract' (that link between action and reward) is clearly communicated, it won't work. So we didn't simply have a bag of beans that we took out of the cupboard when required. Nor did we rely on a pretty chart to record success. Instead, we installed a whole publicly displayed apparatus. It stood atop a kitchen counter. When you wanted a jelly bean, you had to push a button. This started everything but a song and dance, following which a single jelly bean was dispensed. 

Now this is all very well, but right at the beginning, the child isn't going to engage in any behaviour that demonstrates how the whole deal works. Demonstration is the key. To overcome this, we decided to apply the reward universally. That is, anyone - including us and our guests - would be entitled to a jelly bean as they emerged from the bathroom.

For weeks, I would emerge from the bathroom to find my daughter standing outside, asking me if I was allowed one or two jelly beans. If we forgot to take one, we would be reminded. Outsiders could monitor the whole household's performance as they came in: 'Looking a bit empty there; better cut down on the coffee.'

Did this work? It certainly put the whole issue on the table, and our daughter showed much interest in spending time on the potty. But, after a couple of weeks, we had little to show for it except for a personal dislike of jelly beans as their consumption came to us to be associated with unpleasant activities. We made a conscious effort to disguise our toileting activities to avoid having to eat any more!

At this point, we had to contemplate a ratcheting up of the reward - to chocolate frogs. This was a decision we did not take lightly, as we were well aware that at some point we would want to end our little incentive contract. But we knew that if anything was going to get the behaviour we wanted, it would be this; we could work on our exit strategy later.

To a casual observer, it did the trick. While precious few jelly beans had been awarded to our daughter, she was now getting two or three chocolate frogs a day. Moreover, we started saving on nappies.

Alas, a more careful audit of our household performance would show dubious results. Our daughter realised that there was a very easy way she could acquire a frog. In her time-rich life, she would simply wait. Basically, she worked out that if you sit on the toilet long enough, something will happen. And so she did this, for hours and hours on end.

Now we let this go on for a while in the hope she would get a feeling for her own bodily functions. But it was starting to get worrying and to interfere with normal daily activities. So when she didn't appear to tire of these activities, we changed the reward. She was only allowed to sit on the toilet for short (!) half-hour bursts.

Nonetheless, during all this training, no sooner had we fixed one problem than another began; she got too much control! Our daughter realised that by holding back, she could convert one trip to the toilet into two or three, and thus triple her frog consumption. Tim Harford26 likens this effect to the way pole vaulter Sergei Bubka, who was paid a cash bonus each time he broke the world record, chose to do it a centimetre at a time. 

That's the risk you face when you set down clear, objective rules for rewards. You often get what you pay for. Eventually, the motive we initially hoped for - getting out of diapers and into more exciting underpants - took over. But the management process was painful and I can't prove whether this wouldn't have all happened of its own accord anyway, without rewards. 

This is an edited extract from Parentonomics: An Economist Dad's Parenting Experiences by Joshua Gans © UNSW Press 2008. http://www.parentonomics.com