Non-Market Decision Making Reading Notes Section 3.7

3.7 Family
[PDF] Allen, Douglas W., and Margaret Brinig. 1998. “Sex, Property Rights, and Divorce.” European Journal of Law and Economics 5: 211-233.

  1. 2 Main Points
    1. Consent for sex may be treated as a good. Whoever has lower demand becomes a supplier and obtains some bargaining power equal to the difference.
    2. Male and female drive peak at different points in the life cycle. While men usually have higher drive, during the “middle years of marriage” it’s not uncommon to see a reversal.
  2. 2 Key Q&As
    1. What 5 hypotheses are generated by the model?
      1. Spread in divorce age: As the age of the husband increases relative to the wife the spread of potential divorce ages increase.
      2. Gender differences in the age at divorce: As the age of husbands increases relative to their wives, the average age of husbands at divorce is expected to increase.
      3. Marriage duration: The duration of the marriage should fall as the husband increases in age relative to the wife.
      4. Frequency of sex: The frequency of sex should diminish over the course of marriage.
      5. Adultery: Husbands should be more likely than their wives to commit adultery in Regions I and III, while wives are more likely in Region II.
    2. Is traditional marriage, defined as marriage where the husband is older, considered to have more or less risk of divorce?
      1. More.
  3. Personal Notes
    1. Some of the lower quality quotes:
      1. “Generally speaking, realistic assumptions are not of paramount concern to economists”
      2. “Promises made at the time of marriage are never fully binding”
    2. At the top of P 216 he basically argues that when the man wants to leave his wife, the wife shouldn’t have sex with him because that’s all she has to bargain with. The obvious problem is that the husband may want to leave the wife because she won’t have sex with him, and such activity is making the problem worse. This issue is brushed off, not addressed. This weakness is reiterated on P 224, section 4.3.
    3. The incentives for divorce seem to be attenuated rather than exacerbated by omitted factors.
      1. The papers cited take a wide variance in time. Early papers are from the ’60s. Later citations and the paper itself published as late as 1998. How does this affect the analysis in the paper?
      2. The paper has a very narrow focus. What discussion of marriage and sex is really complete without discussions about children, religious values, and familial or community-wide reputation effects? The thesis that men have an incentive to leave a marriage during the middle years is neutralized by the fact that the wife, in a traditional marriage anyway, will have had one or more children and built up nurturing skill. Sure, the man could abandon the children as well as the wife, but this introduces severe religious and reputation issues, as well as a cost to social capital or other benefits to the father derived from the child in the future.

Becker, Gary S. 1974. “A Theory of Social Interactions.” Journal of Political Economy 82: 1063-1093.

  1. 3 Main Points
    1. Benevolence can be thought of as an economic parameterization of love.
    2. Families maximize family income, and the family maximization function is equal to the utility function of the head of the household. This is in part due to the assumption of head benevolence. One way to describe this is as the Rotten Kid Theorem.
    3. Individuals maximize on goods and services, leisure time, environmental factors, and public perception of their aforementioned wealth.
  2. 3 Key Q&As
    1. What three specific applications of his theory does Becker consider?
      1. Family, Charity, and envy and hatred. Merit goods are a notable subsection of charity.
    2. What is the Rotten Kid Theorem?
      1. Even a selfish or rotten kid would not take any actions which reduce family welfare, because the head will cause him to suffer for it. Alternatively, if there is a gain to be made by transferring property from the rotten kid to another family member, the head will incentivize (bribe) the rotten kid into doing so.
    3. What did Smith, Bentham, and Veblen conclude regarding envy and hatred?
      1. Construed as a willingness to forego wealth in order to reduce the wealth of other people, Smith and Bentham dismissed the issue as minor and unsustainable. Veblen, in contrast, cited relative social position (relative poverty) as the key driver of any attempt to attain wealth.
  3. Personal Notes
    1. What seems to be missing is the notion of social capital or trust, the buffer stock nature of social capital, and its effect on real production rather than simple utility. For example, I might loan you money if I trust you to pay it back, and this has a real effect on the economy.
    2. The theory of family utility maximization being equal to the maximization of the head is a great starting point and an interesting limiting case, but it seems to me that this is never perfectly obtained as real would-be heads are not perfectly beneficent toward their own families. Is my claim sound, and if so, what follows from it?
    3. Does the Rotten Kid Theorem involve an interpersonal comparison of utility? Is this problematic? Does such maximization entail market prices and real wealth maximization, in contrast to utilitarian optimization? Would a Stupid Kid Problem, where an individual systematically under or overvalues wealth relative to the market, exist?

Cohen, Lloyd. 1987. “Marriage, Divorce, and Quasi Rents; Or, ‘I Gave Him the Best Years of My Life.’” Journal of Legal Studies 16: 267-303.

  1. 3 Main Points
    1. In general the marriage market value of a woman declines with time more rapidly than does the value of a man.
    2. Associated with the change from fault-basis divorce to no fault divorce was a change in the divorce rate from 1.4% to 6.2% over the period from 1940 to 1980.
    3. In a commercial contract the uncompensated breach by one party will result in the breaching party capturing the other’s rents. However, in marriage, because the rents are usually not received in marketable form, the rents and quasi rents are only partially captured and are also partially destroyed.
  2. 4 Key Q&As
    1. What are the various structures of legal divorce mentioned in the introduction?
      1. Unilateral divorce, mutual consent divorce, indissoluble marriage, and judge-determined divorce. Prenuptial agreements are also a market alternative to legal rules.
    2. What are the four discussed and instrumental components of marriage value?
      1. A lifetime stream of spousal services, rights, and duties.
      2. Insurance against stochastic change in own-value on the marriage market.
      3. To facilitate investment into certain kinds of assets which would be more costly outside of the context of marriage. For example, children.
      4. To smooth lifetime value in the marriage market: Women’s value is more front-loaded and they have some demand to smooth this value. They can exchange with a man who has back-loaded value or they can exchange with a man who has perfectly smoothed value and offer some compensation in exchange.
    3. What are the discussed reasons for women’s more rapid value deterioration on the marriage market compared to men?
      1. Differing mortality rates and other factors lead to a larger ratio of women to men with age, so competition at higher ages suppresses marginal comparative value.
      2. Women usually receive custody of children after divorce, but the presence of children acts as a costly deterrent for future husbands.
      3. Men’s female youth preference may be stronger than women’s male youth preference, contributing to an overall higher social value of younger woman.
        1. The author seems to dismiss the professional value explanation where older men have higher employment value than had-been stay at home divorcee women. He seems to dismiss the objection on the grounds that men and women demand different roles and the stay at home nature of the divorcee does not subtract from her wife value in the same sense that it detracts from her professional value. I accept the latter point but I don’t think the non-importance of employment value follows, because I think the opportunity cost effect enters in either way.
    4. The author stipulates that informal social rules have predominantly protected marriage, and that the legal instruments to protect marriage have largely been inept. In Section VII, what informal schemes are examined?
      1. Taking hostages, strategic age choice, and reduced investment in marriage.
  3. Personal Notes
    1. I agree with the following, and it seems to reinforce note 3.3 on the reading Sex, Property Rights, and Divorce:
      1. “In reliance on the promise of these services, each party invests in assets specific to this marriage and forgoes other opportunities both for marriage and for other activities.”
      2. Such investment seems to substitute for sex, and could completely offset any bargaining power asymmetry.
    2. The distinction between instrumental and expressive values of voting seems to fit well in the author’s dichotomy of marriage value.
    3. He likens the marriage contract to an employment contract due to its non-specific content. Seems like a good joke.
    4. The author claims empirical identification problems in the remarriage market, but the metric seems obvious to me: Average time to remarriage. Moreover, he says that neither the prospective bride nor the prospective spouse carries a price tag, but wealth and income seem obvious proxies which are everywhere else leveraged by economists for that end.
    5. Cohen’s life-cycle description of the value of men and woman on the marriage market, as illustrated in Figure 1, runs counter to Sex, Property Rights, and Divorce both in the general content of the comparative value analysis and also in the particular case of strategic age choice. See Figures 1 and 2 from the latter paper as well. The former paper identifies men choosing younger women as a strategic solution while the latter identifies it as a problem. Who’s right?

[PDF] Grossbard, Amyra Shecthman. 1980. “The Economics of Polygamy.” Research in Population Economics 2: 321-350.

  1. 6 Main points
    1. Women are better off when polygyny is permitted, and men when polyandry is so.
      1. I believe this is only true when polyandry is excluded, and vice versa. If either one is permitted and the other excluded, members of the opposite gender seem to suffer.
      2. But this begs a question: is the allowance of both better than the outlaw of both? A libertarian might ascent, thinking more choice a strict gain, but if that is the case then, why did the institution ever arise?
        1. Time-variant transaction cost story
        2. Stochastic error + path dependency story
        3. Alternate structural story: Monogamy is structurally better for other reasons not considered
    2. When the sex ratio is initially smaller than or equal to one, the smaller the sex ratio the more women and society in general benefit from polygyny, and the more polygyny is likely to occur.
    3. The larger the gain from a marriage, the more a society is likely to experience polygyny.
    4. This is a dubious result which depends on real production of wealth according to a linear production function. If the real world is populated of marriage production which is predominantly utilitarian or expressive rather than material and marketable, or if the real world marginal production benefit of additional partners is sufficiently negative, analytical result 1.c doesn’t follow. I think both such possibilities just raised are in fact true.
    5. This is acknowledged by the author in Proposition 4. However, the author still supposes diminishing positive marginal utility, when in fact it is easily conceived that real-world marginal utility may be negative, even as Q = 2 (wives/man).
      1. Proposition 5: Within a polygynous society, men generating a higher gain from marriage are likely to have more wives.
      2. Proposition 6: Because of positive sorting, female inequality in productivity-augmenting traits is likely to dampen the positive effect of male inequality on the incidence of polygyny
  2. 5 Questions
    1. What is the difference between polygamy, polygyny, and polyandry?
      1. Polygamy includes any marriage of more than 2 people of any sex.
      2. Polygyny specifically refers to one man marrying multiple women.
      3. Polyandry specifically refers to one woman marrying multiple men.
    2. How is the sex ratio, as used in main point 1.b (Proposition 2), measured?
      1. Women/man
    3. What is the difference between brideprice and dowry?
      1. Dowry is paid by a women so that a man will marry her and brideprice by the man so a woman will marry.
      2. What kinds of cross-cultural evidence are presented in favor of the theory?
      3. The institution of brideprice is more often found in polygynous than in monogamous African societies
      4. The sex ratio effect was validated by a historic case in Paraguay. A certain war resulted in a massive shortage of males. Consequently, the prohibition on polygyny was temporarily overruled.
      5.  On continents where more children are demanded, polygyny is more prevalent.
      6. A number of other points.
  3. What are some of the factors of number of wives identified as significant?
    1. Looking at (3), across all marriage durations with highest r squared, all reported vars had .05 significant results except seclusion, but it was significant at .1 level (p~.075).
    2. Such factors include age of husband and wife at marriage, those values squared, age of husband at the interview, wealth, occupation, and number of children.
  4. Notes
    1. To claim that polygamy is exhaustively decomposed into polygyny and polyandry is a false dichotomy in theory and history.
    2. Historical cases of alternate arrangements https://en.wikipedia.org/wiki/Group_marriage#Non-European_cultures

[PDF] Hess, Gregory D. 2004. “Marriage and Consumption Insurance: What’s Love Got to Do with It?” Journal of Political Economy 112: 290-318.

  1. 3 Main Points
    1. When markets are incomplete, individuals may choose to marry to diversify their labor income risk. Love, however, can complicate the picture.
    2. If love is fleeting or the resolution of agents’ income uncertainty occurs predominantly later in life, then marriages with good economic matches last longer. In contrast, if love is persistent and the resolution of uncertainty to agents’ income occurs early, then marriages with good economic matches are more likely to be caught short with too little love to save a marriage. Consequently, once married, the partners will be more likely to divorce.
  2. 3 Key Q&As
    1. Under what conditions are two individuals less likely to marry?
      1. Proposition 1. Two individuals are less likely to marry the more correlated their earnings are, the greater the difference in their expected earnings, and the greater the difference in the uncertainty about their individual earnings.
    2. What three dependent factors were assessed?
      1. Income labor correlation, mean income gap (MGAP), and income variance gap (VGAP)
    3. What were some significant factors of MGAP?
      1. EDW, WHITE, CATHOLIC, PARDIV
  3. Personal Notes
    1. Even if it is a reference to the esteemed Becker, the idea that children are the real marriage incentive bc other stuff eg sex can be purchased is not an accurate picture. Sex per se is not a homogenous good; of key importance is the role of religion which identifies ordinary sex and purchased sex as bads, but marital sex as good. The idea of expressive utility and interest in marriage per se as a religious or similar objective have merit.
    2. Another paper with elaborate equations involving wealth maximization using objective prices. Entailed is the existence of prices and the homogeneity of utility, permitting interpersonal equivalence. Both are almost certainly wrong in many cases.
    3. The equations also model that love is more or less a normal good. What about love as a lexicographically demanded good?

Janus, Thorsten. 2013. “The Political Economy of Fertility.” Public Choice 155: 493-505.

  1. 3 Main Points
    1. The author argues that fertility may be a strategic choice for ethnic groups engaged in redistributive. His findings are consistent with his theory, but they are also consistent with an emergent rather than strategic result.
    2. The author finds that formal institutional weakness (WDI) positively interacts with ethnic diversity.
    3. Social groups may choose fertility in some sense by selecting a group norm which creates an incentive for households to coordinate toward the desired social level of fertility. Actually, reverse causality seems more likely to me, but the author ignores that possibility. In either case, evidence for the existence of group fertility norms is given through a case study in exiled Tibetans.
  2. 3 Key Q&As
    1. What two reasons to affirm the thesis are given in the introduction?
      1. Individuals in diverse societies tend to vote for co-ethnic political candidates. Second, if ethnic groups allocate society’s resources via conflict or bargaining in the shadow of conflict, then fertility might increase their combat strength.
    2. What are some of the significant determinants of fertility identified and their directions?
      1. Positive: Diversity, the interaction of diversity and institutional weakness, internet access, and the constant.
      2. Negative: improved water, the cultures of eastern Europe and Asia, the interaction of diversity and Democracy, and political instability.
  3. Personal Notes
    1. The author identifies the effect of diversity on fertility, but even if no such effect is found the strategic behavior may be there at the group level. That is, the major ethnicity may be fertility-complacent while the minorities are fertility-positive. Instead of measuring social fertility I think a better metric would be fertility among minorities or the ratio of minority to majority ethnicity fertility. I completely buy that minorities have higher fertility rates, although I don’t really buy strategic political behavior as the motive. My reason for buying the fertility rate thing is just the data that the thing happens, but I’m not convinced it is strategic rather than emergent.
    2. The author claims that redistributive gains to fertility should mainly be present where weak institutions erode property rights. Using World Bank’s WDI as a metric specifically requires a pure formalist approach to institutions, which all good institutional analysts understand to be the shittier model of institutions (by tautology, of course).
      1. Formal institutions have no legs apart from informal ones: Informal institutions are all that actually matter. Analysis of formal institutions, such as the written law, often leads to dramatically misleading conclusions when compared to the way society in fact values or behaves at any given time.
      2. My alternative: Weak formal institutions are associated with stronger, not weaker, property rights. If we are talking generally about institutions, including informal institutions like norms, the only valid concept of weak institutions is general perpetual beta, since an institution in this (better) framework is any collection of beliefs, and the lack of such things indicates a general lack of firmly held beliefs. Because general perpetual beta would be associated with higher social forecasting, it would seem to be that social strategic behavior would become more obvious and thereby more likely to undergo attenuation in such context.
      3. Does the correlation with IW give evidence to the possibility of a correlation with informal institutions or are these independent factors? Are strong informal institutions plausibly positively associated with strategic social behavior? Granted, I would expect an attenuated coefficient as per 3.2.2, but not attenuation to 0.
    3. The robustness checks look like crap to me. There is no long model which includes all of the significant factors. It looks like internet is a key factor, it has a huge cross-correlative influence on the factor of interest, and it is only assessed in one model. This, coupled with the enormous size of the target data set and the few factors assessed within that data set, provide some reason to worry whether factor selection has been exposed to a selection bias rather than an exhaustive and conclusive critical analysis.

[PDF] Leeson, Peter T., Peter J. Boettke, and Jayme S. Lemke. 2014. “Wife Sales.” Review of Behavioral Economics 1: 349-379.

  1. 3 Main Points
    1. They argue that wife sales in England were an appropriate (informal) institutional response to an odd constellation of property rights and law.
      1. That constellation simultaneously required most wives to obtain their husbands’ consent to exit their marriages and denied most wives the right to own property.
      2. Wives leveraged wife sales (indeed, even insisting on their own sale) in order to indirectly bargain and exit an unhappy marriage.
  2. 3 Key Q&As
    1. Why do wife sales stop?
      1. When the women got property rights they were no longer needed.
  3. Personal Notes
    1. this paper is awesome lmao. Voluntary self-sale in the oddest way; previously I only knew of the Jewish voluntary slavery as debt payment and the old UK (English, Irish, etc) custom of indentured servitude a la my ancestry.
    2. I never heard about this in my History of Feminism class! That class was more focused on the English “wife legally doesn’t exist and has no rights” discussion.
    3. informal institutional analysis vs formal institutional analysis? compared to the other paper
    4. Compared to Leeson’s other paper?
  4. Class Notes
    1. Cutsinger: It doesn’t change the narrative that much.
    2. Leeson: This paper caused plenty of harsh reactions when it was published. We emphasized that is was voluntary so it wasn’t like slavery.
    3. My Thoughts:
      1. If a woman had enough bargaining power to cause men to transact in a way she desired, in particular when it is against one or both of their wills, it seems to me she certainly had de facto property rights, even if they were informal or unrecognized by formal law.
    4. Relation to other papers:
      1. Leeson: We can link this paper to the Cohen paper according to the idea that divorce has become easier over time. In Wife Sales divorce was only allowed by an act of Parliament, then it became easier through a wife sale, later it was allowed in the US with fault, and finally no fault divorce became a thing.
      2. Leeson: It also relates to the Cohen paper in that the Wife Sales paper sees women as a driver of divorce, but the Cohen paper sees middle aged men as a driver of divorce, as well as women during other periods in the marriage life-cycle.
      3. Me: The Wife Sales paper also relates to the Janus paper on this question of formal vs informal property rights and institutions. The Wife Sale was an informal institution and women exhibited informal property rights through these sales, but the Janus paper conducts a formal institutional analysis using World Bank info.
    5. Why do people get married? Why not just have a Civil Union or live together, perhaps even taking on a religious marriage, without wanting the State’s paper record of marriage?
      1. 2 kinds of marriage: Traditional/religious marriage and state-recognized marriage.
      2. In any case it seems to be a combination of expressive and instrumental value.
      3. Reasons for traditional marriage:
        1. God-approved vehicle for sex
        2. Moral signaling
      4. Reasons for legal marriage:
        1. There are some legal advantages, but terribly few which aren’t also gained under civil union.
        2. Second-best moral signaling: A way for non-Christians to claim moral status when the Christian church won’t directly give such validation. Eg, gay marriage and atheists getting married may feel validated by a state-backed marriage certificate.
        3. There may be something to the idea of the state as a trustworthy records keeper. A man may claim he’s not married but truly be married. In older times there was essentially one Roman Catholic church who could perform this records keeping, but these days the man may have been married in some small denomination and go off to be married under a new denomination, so the denominations may not be able to validate marital status as well as the state.
        4. Here’s a weird problem related to #3. I have a friend who got married and now wants a divorce, but the wife won’t grant it without taking half of his stuff. So he isn’t getting divorced but their separated and there’s another girl he would marry if he could. In this weird situation it seems like the state is effectively blocking divorce in a case where denominations would be powerless to block him. My friend is protestant and I think he wouldn’t have a real problem getting married under a different denomination’s preacher as long as such preacher was protestant of some sort.

[PDF] Leeson, Peter T., and Paola A. Suarez. 2017. “Child Brides.” Mimeo.

  1. 3 Main Points
    1. The thesis is that son preference, the preference for male over female offspring commonly found in developing countries, generates a supply and demand for prepubescent brides in impoverished societies.
      1. The mechanism is strangely that the culture has both a surplus and a shortage of women.
      2. Son preference leads to lower survival rates for woman and parent willingness to supply child brides.
      3. Low survival rates for women leads to a shortage of brides demanded by grown men, and some willingness to pay.
    2. Why are any child brides offered at all when abortion is on the table in India? The authors posit that killing or abandoning a baby presents a prohibitive psychic or utilitarian cost for some families, and this results in early marriage.
  2. 3 Key Q&As
    1. What 3 testable predictions are presented in the article?
      1. “Our theory thus predicts: first, that stronger son preference will be associated with the birth
        of more unwanted daughters; second, that stronger son preference will be associated with younger
        post-pubescent female age at first marriage; and finally, that stronger son preference will be
        associated with more prepubescent brides”
    2. Which 4 of the considered factors yielded a significant relationship with unwanted daughters, and in which directions?
      1. Son preference correlated positively and three other factors were negatively related: ideal fertility, sex ratio at birth, and wealth. Another interesting result is that only son preference is significantly related to post-pubescent female age.
    3. Are dowry/brideprice significant factors in considering the incidence of early female marriage?
      1. No.
  3. Personal Notes
    1. Relevant: How the Internet Gave Mail-Order Brides the Power
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