Spending on a Grand But Tiny Scale: the $10,000 Dolls' House

Edwin Jacobowitz has just spent the afternoon doing up a two-storey colonial-style house in New Jersey. It's been hard work. First he had to wire the house for electricity, applying a chandelier in the dining room and spotlights elsewhere. Then he wallpapered five rooms, each with a separate printed design to the owner's specification. After that he laid red oak floors throughout, glazed the windows and put the roof on, laying shingles in a patterned effect. By the end he'd built up quite a sweat.

Mr Jacobowitz's afternoon may sound like Extreme Makeover on amphetamine, but the reason he can accomplish it all in one afternoon is that he works on a scale unfamiliar to most builders and interior designers. Mr Jacobowitz is a master of the miniature; dolls' houses to you and me. He runs a family business which has made manifest the fantasies of little girls and boys, and their parents, for more than 30 years.

Mr Jacobowitz has moved his shop from Gramercy Park in downtown New York into Manhattan's most famous children's store, FAO Schwarz by Central Park.

On the first floor, sandwiched between Paw Parazzi pets and model paints, Mr Jacobowitz has pitched his dolls' house boutique, peddling dreams seven days a week. You don't have to be rich to partake: some kits start at $20 (£10). But the great thing about his store is that if you are rich, you can certainly spend. Step right up and buy a hand-painted Victorian four-poster bed, about the size of a cigar box, for $600. Or the Queen bed with silk drapes that he sold to a woman last week for $500 - her son had wanted it for a school project.

Most of the houses on display are classic American clapper board, the kind you'll find all down the east coast. There's a Boston house with dormer windows and arches above the doors and solid colonial residences that are straight out of the suburbs. The pride of the display is what Mr Jacobowitz describes as a federal style 10-room house common on Long Beach island, the Hamptons or Cape May on the New Jersey shore. It has 32 windows and 2,100 wooden shingles on the roof, each one hand laid. It costs $5,000 to buy ready made, but clients often double that amount once they have furnished it.

And that's just the kits. The real beauty of what Mr Jacobowitz can offer is in the customised service. Take the woman who arrived in the shop at 9am and left at 6pm - she spent the entire day, bar one hour off for lunch, measuring, comparing and selecting fittings for the dolls' house she bought. Or the former wife of the governor of Oklahoma, who has commissioned Mr Jacobowitz to make an exact miniature replica of the mansion they restored in Oklahoma City. Or the man who bought a special wedding anniversary gift for his wife who loved Proust so much that he asked Mr Jacobowitz to make a replica of the novelist's Parisian apartment, modelled from pictures at the Proust museum.

His own favourite, though, was the time when a major Manhattan company contacted him and asked him to build a present for the retiring president. He loved his office so much, and had spent so much of his life inside it, they wanted to give him a miniature version of it, replete with antique furniture made to match, sofas in precisely the same material, and identical lamps and light fittings. It was presented to the president on board the cruise the firm gave him as a parting gesture. He was, Mr Jacobowitz said, overwhelmed.

A pattern by now is clearly emerging. The people who are most obsessed by toys, most wrapped up in childhood fantasies, are not children at all, but grown-up kids doing all they can to cling on to their dreams.