To market, to market

I often have to convince people that I what I do is actually economics. While most economists take it at face value, I find that many non-economists, i.e. most people in the world, find it odd that I would consider my process of analyzing investments in children and marriage markets and relationship quality economics. The reason, though not always expressly put, is that most people think economics is about money. An economist, they think, should talk about GDP or the stock market or inflation or the debt crisis.

Lots of economists do, and I do, too. Despite being a microeconomist, I have enough knowledge and background and read the news enough to talk at least somewhat intelligently about macroeconomic issues. Although, once a student asked me in an intermediate macro class to explain credit default swaps. I declined to answer due to time constraints, but really, there are better people who can answer that question than me. Just like there are better people than me to answer questions about why the stock market tanked again today.

But I’m getting off topic. I started reading the NYT this morning after a weekend in the mountains and stumbled upon the Magazine’s Modern Love column, about blogging exes, and another that seemed to call out for my own blog post, before I had even read it. I hadn’t gotten two paragraphs through it before this line appeared: “In short, there really is a marriage market in countries around the world, and economic principles apply to it.” The author, Robert H Frank, had spent the preceding paragraphs discussing dowries, implying that you actually need money to have a market.

Though Frank goes on to discuss how principles of supply and demand have shifted cultural expectations and allows for the existence of a market where money doesn’t change hands, the initial statement does something of a disservice to the field. Markets exist without money. Marriage markets certainly exist, both with and without money. His sentence could have been easily modified to say something about markets how they are popularly understood, or something. It’s semantics, I know, but semantics are important when you’re faced with reinforcing stereotypes. And for the people who don’t make it past that third graf, they perhaps stay with that idea that markets need money to function.

Regardless of the initial misstep, the rest of the piece suggests something rather extraordinary, but also astoundingly simple. While much of the cultural phenomena of later marriage, sex outside of marriage, women going back to work and getting more schooling have, at least in economics papers, been attributed to the introduction of reliable birth control and time-saving devices like the in-home washing machine, Frank suggests that, at least in the US, an oversupply of women in the baby boom generation “bent cultural norm towards men’s preferences.” That is to say that as men were scarce, society played to their more open sexual attitudes, leading to, in particular, more sex outside of marriage and perhaps the decline of marriage as an institution. It’s the war’s fault, essentially, that we’re promiscuous and we cheat and we divorce our spouses at a high rate.

He goes on to use the US, post-war example as a parallel to the much-hyped sex ratio imbalance in China right now. He cites a paper where the authors show that families with sons are spending more on conspicuous consumption goods, particularly housing, in order to display their wealth and better attract a wife for their son. The sudden oversupply of men in China (and other countries in Asia) means that men are changing their spending habits to appear more stable, more able to provide for a wife and children long-term.

The comparison doesn’t seem quite right to me, though. In particular, there is a tremendous waste of resources associated with building bigger homes (or homes that just look like they’re bigger) for the purpose of attracting a mate. For families who are building with money that is marginal, that might otherwise be saved for retirement, or a child’s education (the son they’re trying to marry off or a future generation), spending on house improvements, though necessary according to the authors, is not necessarily the best use of money, nor is it sufficient to find a wife. One could argue that delaying marriage is a waste of resources in terms of producing quantity of children as women spend their most fruitful childbearing years on other things, but I think we can agree that more education for women is not necessarily a bad thing. Even if you want to go that route and get into money spent on IVF for older women, etc, it’s not as overtly wasteful as building sham third stories.

But more importantly, in societies where decisions about marriage are often still made by a family elder (a patriarch?), the shift might not really be towards women’s preferences–the preferences of the scarce resource, as it may be–but preferences of women’s fathers, or both parents. In fact, it’s pretty thinly justified by evolutionary biology and even downright sexist to suggest that women are just in it for bigger houses. Then the comparison breaks down entirely. Supply and demand may be giving more influence to one group, but it’s not the underrepresented group, it’s the group that controls the scarce resource.

The idea that an oversupply of men would shift a world to be more accepting and respectful of women and girls and their wishes and desires is wonderful. The pull of a simple economic explanation (particularly one that is backed by another science, biology in this case) is strong, but likely missing much of the story. Evolutionary biology likely does play a role in cultural norms, but the preponderance of gender-based violence, bride-buying, trafficking of women, son preference, bride burning, etc should make us wary of explanations that rely on assumptions that women are suddenly powerful and influential due to being scarce without exploring their cultural roles in shaping their own lives.

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Ploughs vs. sticks

There is small strain of the economics literature that deals with religion and culture and tries to take these things at face value. While much of economics (and economists) take culture out of the picture when creating models, there are whole conferences devoted to how culture influences our decision-making.

Much of the reason that culture is often excluded from economic models is that it is, or at least seems, endogenous. Culture determines our decisions which determines our culture, so we have a chicken-and-egg argument. You could say, then, that the point of the field of Economic History—which aims to bring economic reasoning to historical events and data–is to tease out which came first, the culture or the decision, the tradition or the allocation.

A recent paper by Alberto Alesina, Paola Giuliano and Nathan Nunn tackles this chicken-and-egg question by comparing places where the plough was readily adopted and places where more labor (digging with sticks, weeding by hand) than capital prevailed as the dominant agricultural tool. They argue that fertility, or how many children one decides to have, was influenced on a societal level by the adoption of the plough. The reasoning is rather straightforward. The plough, as a labor-saving device, reduced the need for women and children in the fields, thus creating a less egalitarian culture–where women stayed at home instead of working outside the home–and one where women had less children.

They note the fertility result as surprising; their original hypothesis had been that a plough would increase fertility as it increased the time mothers would have to bear children. I don’t find it particularly surprising, knowing it takes a lot of hands to run a farm, but I do think it’s an interesting attempt to identify the source of cultural norms.