For me, it ranges. If I'm doing something like sugar cookies, it's around $2-3 a person. If I'm making goodie bags for kids, it can be more than that. For my son's second birthday I think it came to around $4.50 a kid and they got a hat, bandana, train whistle, and wooden train.
Up to $5. For DS1 we had a superhero party with Capes from the Dollar Tree (Tip: go in October and score lots if cheap costume stuff) to decorate as their favor. I spent more on the decorations for the capes than the actual capes but then I also had little bags of candy & stickers too.
Ever since DS's first birthday, we've stuck with giving children's books as favors and we love it. We spend about $3.50 per book via Amazon, write a thank you card in the cover, and send it home with the kids. We also get to-go boxes from DH's cousin's restaurant and let each kid take leftover of whatever treat we had (cake, cookies). It's been a hit with both parents and kids because it isn't some trinket to cause clutter.
Re: Party Favors-How Much Do you spend?
DSs first--I have no fricken idea!!!!