But like most economists, I don't think that the typical person's willingness to pay to do the right thing is very high. What fraction of your income are you giving to tsunami victims?
There is however a purely selfish argument for making another baby that most people overlook. I know a lot of parents who pull out their hair on a daily basis who are sure to disagree. But they are guilty of a grave error: Focusing exclusively on the present. When your offspring are ages 4 and 2, adding a newborn seems like a tough burden. And it is.
But think ahead to your golden years. How many kids do you need to get as many visits, phone calls, and grandkids as you would like? 5? 10? An old saying tells us that "One parent can care for five children, but five children cannot care for one parent." It could happen to you.
Basic microeconomics recommends a simple strategy. Have the number of children that maximizes average utility over your whole lifespan. When you are 30, you might feel like two children is plenty. But once you are 60, you are more likely to prefer ten sons and daughters to keep you company and keep the grandkids coming. A perfectly selfish and perfectly foresighted economic agent would strike a balance between these two states. For example, he might have four kids total - two too many at 30, six too few at 60.
Trust me - you'll thank me later. Your third child ought to thank me too, but we all know better than to expect gratitude from the young. Now all you have to do is convince your spouse!