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¡®Arranged¡¯ Marriage, Education, and Dowry: A Contract-theoretic Perspective

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  • Soumyanetra Munshi

    (Indian Statistical Institute, Economic Research Unit)

Abstract

This paper propounds a contract-theoretic model that addresses the empirically observed conundrum of increased education of the groom being associated with increased dowry transactions. Unlike the human capital approach, we impart a signaling role to education whereby education signals unobservable qualities of the groom that are valuable to the bride. In ¡®arranged¡¯ marriage settings that are characterized by incomplete information in the sense that the true quality of the groom remains unobservable to the bride, and in the presence of observable traits like education that are easier for the better quality groom to achieve, education-dowry contracts can potentially serve as a screening instrument to differentiate grooms of varying qualities. In equilibrium, different types of grooms select different education-dowry contracts, with better types being associated with both higher education and higher dowry. Hence the model has interesting and important policy implications since it means that increased public expenditure on education may actually be forcing dowry levels to rise. The paper also discusses historical and narrative evidences in support of its main hypotheses.This paper propounds a contract-theoretic model that addresses the empirically observed conundrum of increased education of the groom being associated with increased dowry transactions. Unlike the human capital approach, we impart a signaling role to education whereby education signals unobservable qualities of the groom that are valuable to the bride. In ¡®arranged¡¯ marriage settings that are characterized by incomplete information in the sense that the true quality of the groom remains unobservable to the bride, and in the presence of observable traits like education that are easier for the better quality groom to achieve, education-dowry contracts can potentially serve as a screening instrument to differentiate grooms of varying qualities. In equilibrium, different types of grooms select different education-dowry contracts, with better types being associated with both higher education and higher dowry. Hence the model has interesting and important policy implications since it means that increased public expenditure on education may actually be forcing dowry levels to rise. The paper also discusses historical and narrative evidences in support of its main hypotheses.

Suggested Citation

  • Soumyanetra Munshi, 2017. "¡®Arranged¡¯ Marriage, Education, and Dowry: A Contract-theoretic Perspective," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 42(1), pages 35-71, March.
    • Handle: RePEc:jed:journl:v:42:y:2017:i:1:p:35-71
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    More about this item

    Keywords

    ¡®Arranged¡¯ Marriage; Dowry; Dowry Inflation; Dowry and Education; Dowry as a Screening Device; Dowry as a Signal of the Quality of the Groom;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • D10 - Microeconomics - - Household Behavior - - - General

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