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Honey, I love you, but I am an Economist !

01 Oct

Disclaimer: Views expressed on this blog are my own, when I express my views based on the reading of works of others, it is solely my interpretation that is expressed here and not theirs.

I know how much people hate it when abstract ideas and emotions considered to have special significance like love, hope, fear, the origin of life, matter and energy etc are explained in scientific terms. It seems to take away the touch of magic, the aura associated with these terms.

Today I was reading a paper which like many other of its ilk I feel, provides evidence that marriage is a contract entered into with considerations of associated costs and benefits and an increase in costs, like the economics costs of getting married would decrease the rates of marriage. Don’t get me wrong, I am a romantic at heart who believes in love and companionship for a lifetime. I do however see marriage as a contract that two parties enter into for economic, social and cultural reasons which can all be broken down into their costs and benefits.

A lot of work has been done in this area of economics, but the one I am referring to here is Changing the Price of Marriage – Evidence from Blood Test requirements (Buckles, Guldi, Price, The Journal of Human Resources , 2011).

A lot of us know about the Blood Test Requirements some countries and states have enacted with regard to marriage. These laws exist to decrease the spread of sexually transmitted diseases and reduce the number of  children born with complications due to stds. The focus here is not on the effectiveness of these laws on reducing the above rates but on whether the additional cost of complying with them decreases the rates of marriage registration. A natural experiment which presented itself as most states started repealing BTR requirements helps make this analysis possible.

The authors have presented evidence which I see as a resounding Yes. They used marriage licensing data across US states from 1980 to 2008 to figure out whether the change in price of marriage actually made an impact on people’s decision to get married. They used a within group estimator with state level fixed effects and time trends to arrive at their results. What this basically means is that they were aware that marriage rates could vary from state to state due to trends specific to those states and also across time due to other factors (a growing importance of career for women could be one I guess). So they separate out these trends in a way that what’s left behind gives us the impact of Blood Test Requirement (BTR) laws on the licensing of marriage. 

Whats to be gleaned from the analysis is that while marriage rates have been historically falling overall, the gap is much more between the states which had BTR compared to those which did not. The repeal of BTR also lead to a jump in marriage licensing rates. The authors found that BTRs result in a 6 percent decrease in marriage licensing rates of the state. Only a third of this was associated with couples moving to a non BTR state to get married. The other considerable chunk (3-4) percent of couples just chose not to get married! Presumably due to the monetary, psychological and time costs of BTR.There are numerous other papers which show that increases in price of marriage due to government policy or an increase in opportunity cost of marriage due to other available options decrease marriage rates.

This has got nothing to do with my position for/against marriage or for/against BTR. (I personally do think arranged marriages make a strong case for BTR though.) This however is considerable evidence that marriage like many other things glorified in life, is just a contract and slight changes in the cost benefit equations result in major changes in the willingness of parties to accept it.

 Buckles, K. , Guldi, M. , & Price, J. (2011). Changing the Price of Marriage. Journal of Human Resources, 46(3), 539-567.

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2 Comments

Posted by on October 1, 2011 in Economics

 

Tags: , , ,

2 responses to “Honey, I love you, but I am an Economist !

  1. How does it matter

    October 2, 2011 at 7:49 am

    A game theory provides another explanation of the same. (Yes, I am inventing the explanation.) What happens when BTR is in effect is that those who are unfit(and know it) do not take the test because anyway they will be deemed unfit, and that too with a cost. Which ‘rational agent’ will do that? Since they do not take the test, they can’t get married. Case in point, unfit candidates denied the ‘right to marry’. Now, obviously absolute numbers will be less.
    Also, moving to other state can be explained by another factor. If you have been living with someone for years, and you live near a state border of a non-BTR state, you naturally choose to travel few miles to get married. I don’t know much details about this. But, there seems more to it than just money.
    And finally, in India at least the money factor doesn’t come into picture. This cost may even become a part of dowry. As is the case with MD fees/donation these days.

    *unfit : more diseased then socially acceptable.

     
  2. madbull

    October 2, 2011 at 8:08 am

    Hey Suman,
    thanks for the comment.
    I do agree with you that the risk of rejection plays a factor. However I would say the following.
    1) I never said its all about money, neither does the paper, it breaks it down into costs. Economists see many kinds of costs which they usually attempt to monetize in order to get quantitative values.
    2) This study was in the United States, if a partner has an STD, the other partner usually knows about it way before marriage. Actually that was one of the reasons mentioned in the paper for possible ineffecitveness of the law, people who decide to get married were in the lowest risk group for STDs anyway, the law was thus repealed in most states. So if you consider the fact that both partners already had information about each other’s health, then all you have left is an economic cost. In India however, it is a totally different story.
    3) Yes your point about travel to non BTR states is very valid. The authors had discussed how decreasing distance from non BTR states further decreased marriage licensing within the state.
    4) In India I believe the benefits would way outweigh the costs, especially in rural areas with forced marriages, child marriages, lack of women’s rights etc. Infact even with the online profile matching and arranged marriages in the cities, I see a huge potential benefit. However, I do not know of a BTR legislation anywhere in India.

     

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