Thursday, November 7, 2019

What is the cost of marriage?

To an economist, the cost of an activity is what you give up to pursue it.

In the year following a divorce, women's living standards fall by 27 percent while men's living standards rise by 10 percent.
Steven Landsburg's classic column on Why Men Pay To Stay Married argues that the difference is a compensating differential, the "price" that men pay to women to compensate them for the relatively unpleasant job of marriage.

If men stay in marriages that cost them a lot of money, that just proves they really like being married. They're getting something they value, and they're paying for it.

When I first read this 8 years ago, I thought it was funny. Now, after 19 years of marriage, I wonder why the price is so low.

3 comments:

  1. I'm sure your wife will appreciate that you have a substantial consumer surplus :-)

    Just a caveat on the stats - the data on which these results are based derive from 1977. More recent studies have shown a woman's median familly income per capita after divorce is only 14% lower (and only 3% lower for remarried or cohabiting women).

    Women who were in the workforce before divorce and with higher education have an even smaller gap.

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  2. They have finally explained why women are always trying to change men!!! It does all make sense now. This article is truly enlightening in more ways than one. Who would have guessed that economics could make sense out of marital issues.

    Quoted from the article:
    “So—again, with myriad exceptions—a woman's optimal strategy is to settle for an imperfect mate and then try to change him. A man's optimal strategy is to search until he finds someone close to perfect. It's therefore no surprise that women, more often than men, should end up regretting their choices.

    Once you realize there's a biological clock, you should be able to predict that men (having searched long and hard for the perfect partner) would make financial sacrifices to preserve their marriages, and that women who stay married to imperfect partners would be kept in their marriages by financial rewards—or, to say the same thing another way that women who leave their marriages would make financial sacrifices. (And you should also be able to make a lot of auxiliary predictions, such as this one: Wives try harder to mold their husbands than husbands try to mold their wives—because husbands wait until they've found wives who need relatively little molding.) “

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  3. In statistical terms these numbers may be correct, but the value of marriage I understand it can be adjusted by region and country. Since it is not assessed in the same way, in each country, as well as between the cultural groups.
    I presume that the inferred in this article, is referenced to a family where both partners work, and wives have 10 percent less income than their husbands, where marriage is an element that could serve women as element of elevated income, or balance between the generous economic factors.
    But what happens with those marriages with only one income, being in the majority of cases the income is the husband. In other words the increment in income of wives is a 100%. From the point of financial contributor, men would be paying around 50% of their income to be married.
    Evaluating other elements in this relationship, the wife would be receiving an increment by 100% in revenue, but adding marginal value to the quality of life of the husband, as provides comfort, pleasure, peace, company, as well as mental and spiritual rest that which allow to recover every day for the next work day.
    It does not matter how much they pay, with the right partner, men would never pay enough to cover the added value to the quality of life provided by the right wives.

    References: Froeb, McCann, Ward, Shor: (2014) Managerial Econonics. A Problem Solving Approach, Ohio: South Western Cengage Learning

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