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Friday, February 02, 2007

Incentives matter - marriage edition

This World Bank working paper is interesting:
In a setting where husbands wield considerable coercive power, forms of marriage should adapt to protect the interests of women and their families. The authors study the pervasive marriage custom of watta satta in rural Pakistan, a bride exchange between families coupled with a mutual threat of retaliation. They show that watta satta may be a mechanism to coordinate the actions of two sets of in-laws, each of whom wish to restrain their sons-in-law but who only have the ability to restrain their sons. The authors' empirical results support this view. The likelihood of marital inefficiency, as measured by estrangement, domestic abuse, and wife's mental health, is significantly lower in watta satta arrangements as compared with conventional marriages, but only after properly accounting for selection.
There still seems to be a potential for welfare reducing marriages if some women are encouraged to marry someone they would rather not.

Nevertheless, the practice is an example of how to use the power of incentives to solve a problem.

Comments:
You said: "There still seems to be a potential for welfare reducing marriages if some women are encouraged to marry someone they would rather not."

I think a better way to say it is "if some women are _required_ to marry..." Incentives are not compulsion.

I find the arranged marriage system bizarre and repulsive, but viewed within its cultural matrix it superficially appears to produce positive results. (By "superficially appears" I mean that I haven't really studied it; by "positive results" I mean stable marriages with some indication of love recorded by both parties.)

-Billy
 
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