China thinks that children have diminishing marginal value

According to this NYT story, the Chinese government has asked that the parents of Chinese exchange students receive larger insurance payments than ordinary New Zealanders who lost loved ones in the Christchurch earthquake. The government argues that these families have lost not just a child but a “breadwinner” and that the pain from loneliness will be more severe without other children around.

I guess the assumption here is that children have diminishing marginal value. According to this theory, second children just don’t make you as happy as first children do. This makes sense for consumer goods like money or socks. Clearly I would value my last pair of socks more than I currently value my 15th, and I would need my last dollar more than Charlie Sheen needs his 50 millionth and 1st. But it’s pretty ridiculous to apply the same logic to personal tragedies. I’m surprised that anyone in the Chinese government had the gall to say this even if they believe it.

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