DHARMASHASTRA NATIONAL LAW

UNIVERSITY JABALPUR

SUBJECT: ECONOMICS
SEMESTER- IV

TOPIC: ECONOMIC ANALYSIS OF MARRIAGE

SUBMITTED TO- SUBMITTED BY-

Dr Isha Wadhwa Ashutosh Gautam

ASST. PROFESSOR BA.LLB. (Hons.)
Roll no.- BAL/022/18

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 ACKNOWLEDGMENT
I would like to extend my heartfelt gratitude to Hon’ble Vice Chancellor Prof. Balraj
Chauhan for giving me the opportunity to work on this project.

I take this opportunity to express my profound gratitude and deep regards to Dr Isha Wadhwa
(Asst. professor) for their exemplary guidance, monitoring and constant encouragement
throughout the completion of this project topic. The blessing, help and guidance given by
them from time to time shall carry me a long way in the journey of life on which we are about
to embark. Also, the guideline provided by them to stick to the deadline was also
encouraging.

I am obliged to students of Dharmashastra National law University for the valuable

information provided by them in their respective fields. Lastly, I thank almighty, my parents,
brother, sisters and friends for their constant encouragement without which this assignment
would not be possible.

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Contents

CHAPTER 1........................................................................................................................................4
TITLE OF RESEARCH WORK....................................................................................................4
SCOPE OF STUDY.........................................................................................................................4
RESEARCH OBJECTIVES...........................................................................................................4
RESEARCH METHODOLOGY...................................................................................................4
CHAPTER-2........................................................................................................................................5
INTRODUCTION...........................................................................................................................5
CHAPTER-3........................................................................................................................................6
AN ECONOMIC ANALYSIS OF MARRIAGE...........................................................................6
THE DECISION TO MARRY...................................................................................................6
MARRIAGE MARKETS............................................................................................................7
DISTRIBUTION OF OUTPUTS AND ITS EFFECTS............................................................7
EFFECTS OF CHANGES IN LAWS & LEGISLATIONS.....................................................8
ALTERNATIVE APPROACHES AND MODELLING..........................................................9
CHAPTER-4......................................................................................................................................10
CONCLUSION..............................................................................................................................10

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CHAPTER 1
TITLE OF RESEARCH WORK
Economic Analysis of Marriage

SCOPE OF STUDY
The scope of study was limited to journals and research papers.

RESEARCH OBJECTIVES
 To find out the effect of change in laws and legislations.
 To find out the distribution of output and its effects.
 To find out how rational choices play a part in assessment and options to enter
into marital unions

RESEARCH METHODOLOGY
Secondary data has been used in the research as the data and the information of the research
paper has been taken through different online sources i.e. journals, research paper etc. Thus,
the research is purely doctrinal.

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CHAPTER-2
INTRODUCTION

For a long period of time marriage and love were considered to be the domain of sociologists,
and were largely ignored by economists 1 until the subject and its widespread implications on
lateral phenomena such as population growth, fertility and inequality of income, among
others, stimulated the interest of the Nobel laureate and renowned economist Gary S. Becker
who discusses all this in his 1974 work: ‘A theory of marriage.’ 2 It was subsequent to this
that a strain of economic scholarship in this field began to emerge (albeit after a short period
of neglect and ridicule)

Marriage and love are considered to be irrational activities related to subjective human
behaviour, and most people would probably consider the systematic and scientific analysis of
it using economic as absurd. However as mentioned above, it seems that marriage is linked to
several phenomena in society and can also be explained as a function of various rational
choices, though unknowingly made, and thus has certain causal roots. As also mentioned, the
cognizance of such a method and direction of study is a relatively recent occurrence and as a
result the literature and work available in the field is much less extensive than in other more
established fields or compared even to a sociological analysis of the same institution. The
objective of the researcher through this paper will thus be to study the various works and
research undertaken and how the same has evolved over the years.

This paper does not aim to undertake an analysis of financial gains associated with marriage
or express the institution in monetary terms as economics is often associated with, but rather
to focus on core economic issues of allocation and rational decision making. The focus of the
paper will be to elucidate the manner in which even intuitive and irrational decisions are
based ultimately on some form of rationality, examining how an individual decides to marry
or discontinue such a union. This will be done through the study of work by various
celebrated economists and their causal analyses, while also acknowledging suggestions of
alternate models.

1
Pramit Bhattacharya, How economists view love, marriage, and Valentine’s Day, MINT (Feb. 13, 2015)
2
Gary S. Becker, A Theory of Marriage: Part I, 81 JOURNAL OF POLITICAL ECONOMY 813 (1973).

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CHAPTER-3
AN ECONOMIC ANALYSIS OF MARRIAGE
As mentioned earlier, the pioneering work in this field was done by Nobel Prize winning
economist Gary S. Becker in his two part series: ‘A theory of marriage.’ 3 His work largely
laid the foundation for all future theories on the subject and it seems there can be almost no
discussion on the subject without reference to his work. Economics at its core is the
allocation of scarce resources, determining what is given to whom. Therefore, any economic
analysis of marriage must necessarily answer questions of allocation of resources, work and
roles within the institution of marriage and concomitant decision making.5 This has been
done commendably by Becker by sticking to the core of economic analysis, while using
simplistic tools of cost-benefit and market analyses.6 I shall now proceed to examine the
various elements of rational decision making with respect to marriage as discussed by Becker
and various subsequent works.

THE DECISION TO MARRY

Becker in his seminal work lays the foundation upon which every other work has been built,
stating that two individuals marry so as to maximize their gain and would only do so in a
scenario where both of them gain from the union. He goes on to discuss the various
circumstances under which such incentive to marry would either increase or decrease. It is a
common experience that people with like attributes like education or beauty would have a
higher tendency to enter into a union, which is a concept held to be true by Becker as well in
terms of his theory on positive assortment, except in the case of the attribute of wage rates.4

While Becker speaks of the gains of marriage in terms of increases in an assumed ‘total
output’ (including both market and household output), Yoram Weiss5 elaborates upon varied
reasons for getting married which include among those discussed by Becker, the imperfection
of the credit market and the working arrangement of one spouse investing in the education of
the spouse with a higher earning capacity; the benefits of public (marital) goods; and
insurance against risks and the gains from specialization of roles in a marriage. In a more
recent work, Imran Rasul and Niko Matouschek 6 discuss the change in marriage markets
3
Gary S. Becker, A Theory of Marriage: Part II, 82 JOURNAL OF POLITICAL ECONOMY S11 (1974)
4
Gary S. Becker, A Theory of Marriage: Part I, 81 JOURNAL OF POLITICAL ECONOMY 813 (1973).
5
Yoram Weiss, The Formation and Dissolution of Families: Why Marry? Who Marries Whom? And What
Happens upon Divorce, in The Handbook of Population and Family Economics 81 (M.R Rozenweig and O.
Stark, ed., Elsevier 1993).
6
Niko Matouschek and Imran Rasul, The Economics of the Marriage Contract: Theories and Evidence, 51 THE
JOURNAL OF LAW & ECONOMICS 59 (2008).

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since Becker’s seminal work was written and state the gains from marriage and reasons for
entering into such a union with respect to cohabitation as an alternative, which has not been
adequately addressed by either Becker or any subsequent work. Becker in attempting to
answer this question comments on the importance of raising ‘own children.’ However as
observed by Weiss, there exists a market for children as well, which in the modern context
may be extended to the market of surrogacies, and in any case there seems to be no reason
why own children cannot be obtained out of cohabitation. Thus there seems to exist a
theoretical gap in the modern context and is discussed by Rasul and Matouschek, the
precursor of their reasoning in theorizing marriage as a contract can be found in a paper co-
authored by Steven Stern and Leora Friedberg7 where they deem the contractual nature of a
marriage to serve as a deterrent for breaching certain duties by imposing sanctions on the
party in breach, and providing compensation to the party harmed.

Apart from the contention of cohabitation there is another strand of thought which critiques
the purist and positivist method of analysis adopted by works including those of Becker and
Weiss, which shall be discussed in greater detail at a later stage.

MARRIAGE MARKETS
Just as for any other commodity or phenomenon, there also exists a market which governs the
assignment of mates and incidences of marriage. This is because, at the core of it, mate
assortment and distribution of love is underpinned by the fact that resources, which in this
case is potential mates, are scarce 8 which need to be allocated through some kind of market
mechanism.

Becker used game theory to determine the optimal assortment of mates, which he defined as
the assortment in which the total output in the market was maximized. 9 Weiss too discusses a
similar theory, but under the garb of stability of marriage. This output depends on a variety of
traits which may influence either market or household production and as mentioned before,
there is a positive assortment with respect to traits in most cases. He further discusses the role
of complementarity and substitutability of traits in the determination of positive and negative
assortment, with a negative assortment existing for traits which are complementary. On the
7
Steven Stern and Leora Friedberg, Economics of Marriage and Divorce, Virginia Economics Online Paper
(University of Virginia, Department of Economics 2005).
8
Abhinay Muthoo, Love, marriage, and divorce: what’s economics got to do with it? Bulletin of the Economics
Research Institute 2009/10, no. 1 (University of Warwick 2009).
9
Gary S. Becker, A Theory of Marriage: Part I, 81 JOURNAL OF POLITICAL ECONOMY 813 (1973).

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other hand, Weiss introduces the operation of the Gale-Shapley theory in the market
allocation of mates.

Such a process is facilitated by Weiss’ idea of the search process or algorithm18 wherein he
conceptualizes discrete meetings between a male and female as a session for comparison of
characteristics which results in marriage if the perceived gains exceed the cost involved in
continuing the search. Such a model is largely relevant in the present day scenario where the
search mechanism has largely been formalized and commercialized through online marriage
websites and agencies. In his analysis, Weiss also introduces an angle to the marriage market
which is ignored by Becker, wherein he considers the possibility of participation of married
individuals who are interested in evaluating their ‘outside options’ in order to obtain a
favourable share of output within marriage.

DISTRIBUTION OF OUTPUTS AND ITS EFFECTS

The distribution of marital output among the spouses is largely influenced by the forces of
demand and supply, as is signified by Beckers’ discussion on the effect of sex ratios on the
distribution of marital output, as affirmed by Weiss’ discussion on the search process as
discussed above. Friedberg and Stern believe such allocation is based on the bargaining
power of both the individuals, characterized by the concept of threat points, which are the
points at which the spouse deems the gains from the marriage to be insufficient and
subsequently decides to exit the union.10

Becker goes on to discuss the role of love and caring in the utility derived by either party
from the marital output. Briefly, he states that when the parties care for each other they
receive utility not only from their own consumption but from the consumption of their mate
and in a state of ‘full caring’ the utility received is doubled.This benefit is in addition to its
efficiency in that it eliminates the need for policing costs to ensure fair distribution by the
other party.

EFFECTS OF CHANGES IN LAWS & LEGISLATIONS

Laws enacted with a given purpose in mind often pan out to have effects that were not
anticipated. This is where a Law and Economics analysis is useful in estimating and

10
Steven Stern and Leora Friedberg, Economics of Marriage and Divorce, Virginia Economics Online Paper
(University of Virginia, Department of Economics 2005).

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projecting effects and consequences which may follow a legislative action. The analysis in
this section will focus on two kinds of laws: those related to divorce and polygyny.

The effects of a change in divorce laws to a “no fault” or unilateral model has a variety of
effects. It is generally believed that such a change would affect the distribution and allocation
of resources within marriage with no effect on the actual rates of divorce. However, the
effects on marriage are more conflicting. Becker in his work states that an increase in the ease
of obtaining a divorce might actually increase the proportion of married people in the
population while Schelman propounds that such a law would reduce the rate of marriages
taking place, based on her model of spousal labour markets and the fall in demand for female
spousal labour when such a law is enacted.

In terms of implications of laws against polygyny and polyandry we must first discuss
Becker’s analysis on the efficiency and productivity of the practices of polygyny and
polyandry. He first links the low occurrence of polyandry to the importance of own children.
In the case of polyandry, determination of the father of the child becomes difficult. Though
the occurrence of polygyny is higher than that of polyandry, its productivity to the society as
a whole is low, owing to diminishing marginal returns with an increase in the number of
wives.11The purpose of enacting laws against polygyny however is not to create an optimal
sorting or maximize output, but rather to protect the interests and rights of women. However
as per Becker’s own observations, such a law would reduce the demand for women in the
marriage market and thus drive down their shares in the marital output, in fact making them
worse off.12 An endorsing corollary to this finding is that the bride price or dowry amount
increases with an upshot in the demand for women due to polygamy.

ALTERNATIVE APPROACHES AND MODELLING

The traditional economic analysis has always revolved around strict modelling and working
statistically and mathematically in a linear and positivist manner. However as discussed
earlier, there exist alternate strands of thought which view economics as a pragmatic science
which distinguishes itself from the other social sciences in that it is meant to view problems
11
Gary S. Becker, A Theory of Marriage: Part I, 81 JOURNAL OF POLITICAL ECONOMY 813 (1973).
12
Gary S. Becker, A Theory of Marriage: Part II, 82 JOURNAL OF POLITICAL ECONOMY S11 (1974).

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and answer the very real questions of ‘what, who and how?’ in allocations and problem
solving. Nelson in the description of his method discusses the loss of the centrality of the
study of the true subject matter in the process of a strict adherence to modelling and
theorizing and instead invokes a middle path of sorts which helps better explain the
phenomenon being studied and related behaviour.

Such a view may be substantiated illustratively by seeing how a strict adherence and
interpretation of numerical data and projections can lead to findings inconsistent with the true
reality of a later date. In the second part of his series, Becker links the decline of polygyny to
the decline in income inequality,however this is far from the truth if one were to rely upon the
report of the IMF in this regard13 which states that income inequality has only been widening
over the last decade or so with no substantial rise in trends of polygyny.

Economic models assume actors to always act rationally, however this is not always the case
in terms of marital decisions. Mcarthur in his article 14 (based on his book) undertakes an
interesting analysis of gifting decisions among couples on Valentine’s Day where he
conceptualizes the gift giving practice in terms of a game, similar to that of ‘the prisoner’s
dilemma.’ He shows that ignoring the occasion altogether, with neither partner gifting the
other is the most rational course of action, however human tendency and social pressure gets
the better of couples on most occasions and they fail to adopt the rational choice.

Such a view however takes away from the edge and core of an economic analysis which lies
in its ability to objectify the personal and derive patterns and theses, with causal links among
seemingly arbitrary events. The application of subjective analyses and other such deviations
would be an encroachment upon the domains of sociology and other related fields. Even the
absence of rational decision making as purported to exist in the scenario laid out by Mcarthur
is actually a causal linkage explained in a game theoretic model exhibiting tendencies of
players in a given scenario.

13
Dabla-Norris, E., Kochhar, K., Suphaphiphat, N. Ricka, F., Tsounta, E. (2015) Causes and consequences of
income inequality: a global perspective. IMF Staff Discussion Note, Washington D.C., IMF.
14
Neil McArthur and Marina Adshade, Why It’s Better to Be Single on Valentine’s Day, TIME, Feb. 10, 2015.

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CHAPTER-4
CONCLUSION
The above analysis of literature should thus have made the Researcher’s focal argument clear
in terms of its focus on how causal links can be drawn, and how rational choices play a part
in assessment of decisions and options to enter into marital unions. The conclusions drawn
from the above study may thus be surmised in the following manner.

Stemming from the introductory statement of objectives, the study has highlighted the
various factors that form a part of the assessment on whether to marry or not, while
underscoring the soundness of and preference for a more objective and concrete model as
adopted by Becker, as opposed to a more generalized and subjective one advocated by
Nelson. While inconsistencies may creep into such a model from time to time, the concession
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of its imperfection and that it is no freer from the vagaries of time and individual lapses than
other methodologies in other fields of study does not take away from the merits of its unique
approach in deviating from traditional social sciences, and must rather be considered as its
essence and core which gives it its importance.

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