Tooth Fairy Economics

A recent writing assignment for Colgate (link) led me to the online Tooth Fairy Calculator based on survey data collected by Visa in 2012. The  calculator, which is meant to help parents determine how much money the tooth fairy should leave, reveals some interesting information on how upper income and well educated parents treat the event versus high school educated, low income parents.

About 90 percent of kids receive between one and five dollars, with only three percent receiving less than one dollar under their pillow. Apparently, the quarter that the tooth fairy used to leave no longer cuts it in today’s economy.

You’d think that the more money the family has, the more cash the child can expect from the tooth fairy, but the inverse is true. The greater the income and education of the family, the more likely it is the tooth fairy will leave only one dollar.

The likelihood of a frugal fairy also increases with the age of the parent, with parents under 30 more likely to pay in the four to five dollar range, while parents 35 and up are more likely to give only one dollar per tooth.

An 18-year old mom (or dad)  in Mississippi, the poorest state based on per capita GSP in the U.S., with a high school education and an annual income below $25,000 will give their child five dollars per lost tooth. Compare that to a 40-year old parent with a graduate degree and an income over $75,000 living in Delaware, the state with the highest per capita GSP, who will give his or her child only one dollar per tooth.

It’s hard to draw any psychological conclusions from this, but it’s reassuring to know that the next time your child loses a tooth, you can keep up with the older, wealthier, and wiser Joneses by keeping your tooth fairy frugal.

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