One of the podcasts I listen to is NPR: Planet Money Podcast.
Because I'm still trying to catch up, having listened from the beginning of the podcast, I listened just now to Friday, July 6, 2012, titled, "Allowance, Taxes and Potty Training," having to to with incentivizing children to adjust their behavior vis à vis buying things, potty training, etc.
Anyway, an Australian economist with, now, three children...oldest eleven...rewarded potty trips by his two-year-old with one, two, three jelly beans (increasing the bounty until it worked), and finally, with a chocolate frog. The young child gamed the system by metering out her potty trips so she was getting a prize an hour. Hmmm.
Their allowance was a dollar a week for every year of age. Gosh; that's a real bounty! The oldest child, at eleven, figured out that she didn't need all those things she was clamoring for her parents to buy. Now that she had her own allowance she would be able to...wait for it...save the money and have a real hoard at the end of the year. No need for that ugly dress after all...
When I was a child, one of four children, we got 10 cents a week for every year of age. According to the http://www.usinflationcalculator.com/ , in 1955, when I was 7, getting 70 cents a week allowance would be worth $6.08 in today's money. Possibly because seventy cents does not necessarily multiply in a seven-year-old's mind to dollars, I did not stash it away, and do not have a large hoard today.
That Australian family also had an interesting take on that allowance. If a child wanted to buy candy, there was a 100% tax on it (payable to the parents), to help cover dental fees due to eating candy. As a result, the eleven-year-old decided totally against buying candy at all. An effective tax, if you ask me!
