The size dependence of various aspects of quantum-confinement effects in ${\mathrm{In}}_{0.53}$${\mathrm{Ga}}_{0.47}$As/InP quantum wires was quantitatively examined through photoluminescence experiments with and without magnetic field, along with theoretical calculation. The wires were fabricated by combining electron-beam lithography and reverse-mesa wet etching, thus enabling us to easily control the lateral size independently of the vertical size. Photoluminescence experiments showed distinct peak shifts with changes in the lateral size and showed a shoulder structure that is attributed to laterally quantized second subbands. The energy shift of both levels is explained by a detailed theoretical calculation that incorporates conduction-band nonparabolicity, valence-band coupling, and excitonic correction. The lateral quantum confinement is also demonstrated by the magnetic-field effect on the luminescence spectrum, in which we can distinguish the lateral quantum effects from other factors. As magnetic-field strength increases, a transition from quantum-confined subbands to Landau subbands was clearly observed for first and second subbands. At high excitation levels, the quenching of higher Landau levels was observed. In-plane and perpendicular-to-plane anisotropy of polarization in luminescence was also investigated and the size dependence of this anisotropy in both directions is largely explained by the calculated lateral confinement effect of the optical-transition matrix elements. The phenomenon observed for narrower wires, however, cannot be explained by our theory and is thought to be due to wave-function localization.