an economist's view of marriage

[Christopher Rhoades Dÿkema]

This is interesting, but it leaves out an important question, namely,
how does this relate to the choice between legal marriage and
cohabitation. Probably, according to this model, the weaker party in a
hedge situation, (if I am really being successful in thinking myself
into econ-think) would feel an inchoate and probably unconscious impulse
to actually marry so as to maximize the time that would elapse until the
other party would recruit his/her forces so as to act on the impulse to
end the relationship by divorce.


> Date: Sat, 1 Sep 2001 12:58:56 -0400
> From: Doug Henwood
> Subject: an economist's view of marriage
>
> [it's so hard to tell if these are intended as parodies...]
>
> "Marriage and Consumption Insurance: What's Love Got to Do With
>   It?"
>
>        BY:  GREGORY D. HESS
>                Oberlin College
>                CESifo (Center for Economic Studies and Ifo
>                Institute for Economic Research)
>
> Document:  Available from the SSRN Electronic Paper Collection:
>             http://papers.ssrn.com/paper.taf?abstract_id=277284
>
>             Other Electronic Document Delivery:
>             http://www.CESifo.de
>             SSRN only offers technical support for papers
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>
> Paper ID:  CESifo Working Paper Series No. 507
>      Date:  June 2001
>
>   Contact:  GREGORY D. HESS
>     Email:  Mailto:gregory.hess at oberlin.edu
>    Postal:  Oberlin College
>             Oberlin, OH 44074  USA
>
> Paper Requests:
>   Hardcopies For Libraries: contact Gertraud Porak, Postal: CESifo
>   Inc., Poschinger Str. 5, 81679 Munich, Germany.
>   Mailto:porak at CESifo.de http://www.CESifo.de
>
> ABSTRACT:
>   This paper explores the role of marriage when markets are
>   incomplete so that individuals cannot diversify their
>   idiosyncratic labor income risk. Ceteris paribus, an individual
>   would prefer to marry a "hedge" (i.e., a spouse whose income is
>   negatively correlated with her own) as it raises her expected
>   utility. However, the existence of love complicates the picture:
>   while marrying a hedge is important, an individual may not do so
>   if she finds someone with whom she shares a great deal of love.
>   Is love more important to a lasting marriage than economic
>   compatibility? To answer this question, I develop a simple model
>   where rational individuals meet, enjoy the economic and
>   non-pecuniary benefits of marriage (i.e., love), and then must
>   decide whether to remain married or divorce.
>
>   The model predicts that if love is persistent and the
>   resolution of uncertainty to agents' income is early, then those
>   who in fact married hedges (and for good reason) are the ones
>   most likely to be caught short with too little love in order to
>   save a marriage in the event of an adverse shock. Consequently,
>   under these conditions individuals who are good hedges for one
>   another are more likely to marry one another, although once
>   married, they will be more likely to divorce. In contrast, if
>   love is temporary (in the sense of reverting to a common mean)
>   and the resolution of uncertainty to agents' income is
>   predominantly later, then those who in fact marry hedges will in
>   fact be less likely to subsequently divorce. Evidence is
>   provided to distinguish which of these alternative scenarios is
>   in support of these aspects of the decision to stay married.
>   Additional hypotheses regarding the effect of differences in the
>   expected means and volatilities of partners' incomes are also
>   derived from the theory and tested.

Also, I wonder how such thinkers handle the issue of unconscious
experience. It's hard to imagine that even economists would see "love"
as a wholly conscious process. Do they think they can get by only by
measuring the results? I am copying this to the original author, in the
hope that he can elucidate some of these points.

Christopher Rhoades Dÿkema