The very low birthrate in Japan is threatening its pension system. Although there is much debate about the effects of having a child on household budget, surprisingly few rigorous studies have been made in Japan thus far. This study estimates child costs in Japan by using unit record data from National Survey of Family Income and Expenditure. A 'families with twins' variable is added as the instrument to control for the possible endogeneity of the number of children. The estimated equivalence scale is lower than that of existing studies.