A Venerable Economist on Supply and Demand for Marriage

August 9, 2011

The other night while watching a Hitchcock movie I foolishly engaged with a fatuous crew of logically-challenged blowhards in a debate about my Sexual Revolution charts. Of course, it was pointless – the usual snarky dismissal of the application of economic concepts to the sexual marketplace, full of sound and fury. I am always struck by the irony of this, since the same women who consider sex nothing more than an improvement on the handshake balk and roar at the idea that people negotiate sexual and relationship transactions according to principles of supply and demand. 

I went to bed feeling frustrated, my head aching from having banged it against the wall so many times. While I slept fitfully, the blogging gods took pity on me and smiled. I woke up Sunday morning to a New York Times article by Robert H. Frank, an economics professor at the Johnson Graduate School of Management at Cornell University. Frank has done some very interesting work. He’s known for his writing about the unproductive pursuit of status in society and the strategic role of emotional attachment in love, which prevents someone from dumping their partner for a new and better partnership.

In Supply, Demand and Marriage, Frank validates the application of economic principles to relationships with authority.

“In some cultures, romance isn’t nearly as important as cash when it comes to choosing a marriage partner. And even when money plays no explicit role in selecting a mate, courtship customs are governed by the venerable economic model of supply and demand.

In markets with a preponderance of women seeking partners, the terms of trade shift in favor of men. If more men are seeking partners, the reverse is true. Two cases in point are the baby-boom generation in the United States and the current youth cohort in China.

In the United States, the end of World War II and the return of millions of troops set off the baby boom…By the mid-1960s, many of those babies were reaching the traditional marriage age…At the time, it was American custom for women to marry men several years older than themselves. Women at the leading edge of the baby boom confronted a significant shortfall of potential marriage partners.

Economics teaches us that when there is excess demand for a good, its price rises. According to this model, excess demand for grooms should have caused the terms of courtship to shift in favor of men.

Biologists describe a fundamental asymmetry in the sexual strategies favored by males and females in vertebrate species. Males, whose sex cells are cheap to produce, tend to favor more transient sexual relationships, whereas females, for whom pregnancy and birth are far more costly, tend to favor greater commitment. The sexual revolution, which bent cultural norms toward male preferences, may thus be partly explained by the excess demand for grooms in the 1960s.”

Frank also acknowledges the role of the Pill in ushering in the Sexual Revolution, but points out that it doesn’t entirely explain the huge shift in sexual mores.

“The pill no doubt played a role — perhaps a very big one — but skeptics object that effective alternative forms of contraception had long since been available.

Frank goes on to provide an example of the opposite effect in China, where there are 100 marriageable women for every 120 men.

“According to market models, the terms of trade in the Chinese marriage market should have shifted sharply in favor of women. And evidence suggests that young Chinese women and their families have in fact become much more selective in recent years.”

Frank discusses another important way in which individual behavior reflects the supply and demand of marriage partners:

“Risk-taking among men is another marker of the terms of trade in marriage markets. Biologists have long argued that men’s relative willingness to engage in risk is an evolutionary legacy of polygynous mating systems, those in which males with the most resources took more than one mate. That means males with the least resources were left with none — the worst thing that could happen in Darwinian terms.

Fast-forward to humans today, and we can see why men may view financial risk-taking as a compelling strategy. Let’s say a man who is single has a chance to invest his last $10,000 in a very risky business venture. If it succeeds, he gets $1 million and is much more successful socially in finding mates.

So even if the odds of success are small, it would be rational — in Darwinian terms — for him to make the investment, because he would fail for sure if he doesn’t.

How is this showing up in China? Men are more likely to make risky financial investments in cities with higher male-to-female ratios.”

Frank doesn’t address the American marriage market here, but it strikes me that recent evidence pointing to a “failure to thrive” problem in males aged 18-26 might be significant. With males making up only 40% of college enrollments, and the marriage rate declining, we clearly have a “shortage of grooms.”

If economists are right, then American men should have an aversion to risk. Indeed, men are opting out of traditional routes to status. Instead, the rise of Game points to an alternative way of satisfying the male desire for transient sexual relationships. Social dominance is an effective proxy for hard-won financial status in a sexual marketplace where women are largely focused on short-term mating, i.e. casual sex.

Frank concludes:

“The choice of a marriage partner is one of the most important decisions in life. It’s clearly very different from choosing a car. Yet in many ways, it appears to obey a strikingly similar market logic.”

I found this brilliant graphic explaining the different “prices” of sex and marriage:

Note the different prices for sex (P,s) and marriage (P,m). The difference between the price men will pay to marry (P,m) and the price women seek for marriage (P,s or Price floor) creates a surplus in the marriage market.

See the brilliant post here from Captain Capitalism.

All is right with the world again. I love economics.