For paediatric medicine to advance, research must be conducted specifically with children. Concern about poor recruitment has led to debate about payments to child research participants. Although concerns about undue influence by such 'compensation' have been expressed, it is useful to determine whether children can relate the time and inconvenience associated with participation to the value of payment offered. This study explores children's ability to determine fair remuneration for research participation, and reviews payments to children participating in research. Forty children were interviewed before outpatient visits at two London Hospitals: Great Ormond Street Children's Hospital and the Whittington Hospital District General Hospital. Children were asked to value their involvement in two hypothetical research scenarios - the first an 'additional blood sample', the second also involving daily oral oil capsules taken for a fortnight before further venesection. Background knowledge about familiarity with money, and experience with hospitalisation was assessed. The mean valuation of involvement in the second scenario (£13.18) was higher than in the first (£2.84) (p<0.001). This higher valuation persisted when children were categorised into groups 'aged 12+' and 'below 12'. Those undergoing a blood test on the day placed a higher valuation on participation in the second scenario (£10.43, £21.67, p=0.044). These children aged 8-16 demonstrated the capacity to discern a fair valuation for participation in medical research. The monetary sums are influenced by the time and inconvenience involved in the research, and by the extent of recent experience with hospital procedures. The authors review current ethical thinking regarding payments to child research participants and suggest that a fair wage model might be an ethically acceptable way to increase participation of children in research.