Betsey StevensonMarketplace is continuing its series on “Econ Fun-01,” and they recently featured my favorite economist, Betsey Stevenson. I should give a bit more background. Betsey is also my co-author, and we’ve written a bunch of papers (and op-eds) together, taking the economic approach to understanding the family. As her sometimes co-author, I was pleased to hear of her coolly analytic approach:
Economists see markets at play everywhere. Even in your romantic life. Indeed, I’m one of the worst guests that you can invite to your wedding. Why? Because while most of your guests are listening for your love story, I’m listening for your contract. While others see a romantic courtship leading to the altar, I see people who are satisfied enough to stop searching for someone else.
But before continuing, I should also tell you that Betsey is my significant other. Indeed, we’ve been together over a decade, having met in grad school. And with that background, I’ll let her continue:
Searching for a spouse is very similar to searching for a job. There is not one perfect job for each of us, but there are clearly better and worse jobs. So we hunt, for a spouse and a job. When do we stop? When the offer in the hand is better than the likely offer in the bush.
At a wedding I see a relationship that is good enough to settle down and start investing in. If you get a reasonable rate of return, investment in your relationship will make it truly better than any other relationship you could have.
Betsey’s co-author agrees. Her romantic partner isn’t so sure. And both of us are pleased to hear that it turns out she’s a romantic after all:
As an economist I think that a good marriage, like a good employment relationship, emphasizes shared vision, common interests, complementary abilities, and gains from specialization.
Or I’m at least sort of pleased. Her piece is fun and well worth reading in full (or listening to, here).
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“If you get a reasonable rate of return, investment in your relationship will make it truly better than any other relationship you could have.”
What about the axiom of eggs and baskets?
Given the failure rate, isn’t this also an argument for… uh… diversification?
Isn’t it the case that most mothers would choose to save the life of their child before saving their husband? (Whereas most fathers would save their wives before their children…) The “pricing” in romantic relationships is most often asynchronous, the return rate highly variable, so one could also say with the same analogy that over-investment in any one relationship (i.e. dependency) is unwise. Presuming it a priori to be “truly better than any other relationship” will not necessarily make it so.
Indeed, can children and pets also be considered “relationship investments”?
When do we stop? When the offer in the hand is better than the likely offer in the bush.
I think this forgets to take into account the costs of searching and benifits of behing happy with some one.
For example, say there is someone very likely to make you a little bit more happy in the bush. But, lets say you’re not sure how much longer you will have to continue searching for that person. To find them you will have ton incure X number of blind dates, you’d have to make certain cash outlays all in the atempt to find this person.
I think the economist would say you should stop looking, becuase of the added costs in looking.
Indeed! And as my mentor, Margaret Mead wrote and noted, “Marriage is an economic institution for raising children.” To which I add: Anything else (there occasionally is a something else) is gravy…
Best investment I ever made.
TG, I think your costs are included in the difference between “hand” and “bush” hence the expression to begin with.
Best investment I ever made.
– comment of the day
What about the costs of desertion? Sometimes, to quit a job is not seen in bad light, and the monetary costs are more like losses of future paychecks.
A divorce can be very costly, especially if there are legal fees, alimony, etc. Plus, emotional suffering in some cases.
If you really want to take an economical look at the family, you should read Robert Trivers work about parental investment (1972), and parent-offspring conflict (1974).
The marginal utility of continuing the search for a life partner is no longer worth the cost incurred by it. I am willing to make an investment, both emotional and financial, in our relationship, so that we may maximize our social welfare function. I will promise not to hedge against this investment risk and hope we reach an equilibrium.
My question: are economists more likely to have spouses that are also economists than people in other fields?