Of money and marital bliss

Of money and marital bliss
Comment E-mail Print Share
First Published: Fri, Jul 02 2010. 09 56 PM IST
Updated: Fri, Jul 02 2010. 09 57 PM IST
How does income affect a person’s decision to marry or divorce? Does a bit of extra income breed dissatisfaction with your existing partner, or does it smooth over some of the bumps of married life? These are questions that have been occupying economists ever since Gary Becker’s work on the subject as early as 1981.
The authors of this paper argue that while extra income helps reduce the bickering that sometimes leads to divorce, it could also result in more couples breaking up simply because they now find it easier to bear the costs associated with a divorce. Hence the title of the paper, “Lucky in Life, Unlucky in Love?”
To test these hypotheses, the researchers look at the effect on marriage or divorce of persons who have won a lottery. They find “no evidence that pure income shocks cause statistically significant or economically meaningful changes in divorce rates”. More specifically, they find that fewer than one in 70 couples will be induced to go in for a divorce as a result of receiving a positive income shock that is twice as large as their per capita income.
There is, though, one definite impact of winning the lottery. Hankins and Hoekstra say that they find evidence that winning a windfall reduced the chance of single women to marry in the next three years by as much as 40%. In other words, if you have the money, why do you need to get hitched?
Fatal (Fiscal) Attraction: Spendthrifts and Tightwads in Marriage By Scott I. Rick, Ross School of Business, University of Michigan, Deborah A. Small, The Wharton School, University of Pennsylvania and Eli J. Finkel, Northwestern University
Do birds of a feather flock together, i.e., do people marry people who are like themselves? Or do opposites attract? The authors of this paper say that the former is true, and say that people tend to select spouses with similar demographic characteristics, similar attitudes, similar values, and even similar names. But they tweak that conclusion a little. They say that people also choose mates who share a common dislike of traits they hate in themselves. So, for instance, a person who is a spendthrift may dislike being so and he may therefore end up marrying a tightwad. Or vice versa. This is because “spendthrifts do not experience enough pain for their own good, leading them to generally spend more than they would ideally like to spend. Tightwads, by contrast, experience too much pain for their own good, leading them to generally spend less than they would ideally like to spend”. The “pain” referred to here is what the authors call “pain of paying”, an ache all of us are familiar with.
They then construct a “Tightwad-Spendthrift” scale and place husbands and wives along that scale. The researchers find that tightwads do indeed tend to marry spendthrifts. The problem, though, is that this leads to marital discord and the fiscal attraction becomes a fatal one. This is in spite of the fact that spendthrifts would be financially better off marrying tightwads. The moral of the research? Tightwads will be happier if they marry tightwads and spendthrifts should marry spendthrifts.
Write to simplyeconomics@livemint.com
Comment E-mail Print Share
First Published: Fri, Jul 02 2010. 09 56 PM IST