**Core Concept**
The development of sex identity in children is a complex process influenced by genetic, hormonal, and environmental factors. Sex identity is the awareness and understanding of one's own sex and gender, which is a crucial aspect of a child's psychological development.

**Why the Correct Answer is Right**
Children typically develop an understanding of their sex identity by around 2-3 years of age, as they begin to understand the differences between males and females. This understanding is influenced by a combination of factors, including parental and societal cues, as well as the child's own physical characteristics and experiences. The development of sex identity is closely tied to the process of gender identity formation, which is an essential aspect of a child's psychological and social development.

**Why Each Wrong Option is Incorrect**
**Option A:** Children typically do not develop an understanding of their sex identity until they are much older. This is incorrect because research has shown that children as young as 2-3 years old can demonstrate an understanding of sex differences.
**Option B:** The development of sex identity is not influenced by environmental factors. This is incorrect because environmental factors, such as parental and societal cues, play a significant role in shaping a child's understanding of their sex identity.
**Option C:** Sex identity is the same as gender identity. This is incorrect because while sex identity refers to the awareness and understanding of one's own sex, gender identity refers to a person's internal sense of being male, female, or something else.

**Clinical Pearl / High-Yield Fact**
It's essential for healthcare providers to be aware of the developmental milestones related to sex identity and gender identity, as these can have significant implications for a child's psychological and social development. Recognizing and supporting a child's sex identity and gender identity is crucial for promoting healthy development and reducing the risk of mental health problems.

**Correct Answer:** A. 2-3 years of age.