The Economics of Love: An introduction
Welcome to The Economics of Love! In this series, we'll explore the fascinating intersection of economics and relationships, shedding light on how economic principles can help us understand the dynamics of love. Relationships are a fundamental part of our lives, influencing everything from our happiness to our financial decisions. But have you ever considered that love, much like markets, operates on principles of supply, demand, and trade-offs?
What is the Economics of Love?
The economics of love is a branch of economics that applies economic theory and analysis to understand various aspects of relationships, marriage, dating, and family dynamics. By examining these topics through an economic lens, we can gain valuable insights into human behavior and decision-making.
At its core, the economics of love explores questions like: Why do people choose certain partners? How do economic factors influence relationship dynamics? And what are the consequences of economic decisions in love and marriage?
The birth of the Economics of Love
At the heart of this subject is the pioneering work of economist Gary Becker. Becker, a Nobel laureate, took an unconventional path within economics, applying its principles to topics that were traditionally studied outside of the field.
In the 1970s, Becker published two groundbreaking papers that would become the cornerstone of the economics of love. His seminal work challenged the status quo by introducing economic analysis to the realm of personal relationships, marriage, and family dynamics.
Becker's key insight was to view marriage as a form of human capital investment, where individuals allocate resources, such as time and effort, to maximize their utility. He explored the idea that people make decisions about relationships and marriage much like they make economic choices, weighing costs and benefits.
Importantly, Becker's approach offered a fresh perspective on why people enter into marriages, how they make choices about partners, and how the division of labor within families is determined. His work laid the foundation for applying economic models and principles to the study of love and relationships.
Becker's contributions initiated a paradigm shift within the field of economics, giving rise to a new branch dedicated to understanding the economic aspects of the family. Today, scholars continue to build upon his work, exploring topics such as assortative mating, divorce, and the economic consequences of various relationship dynamics.
Why study the Economics of Love?
Love and relationships have significant impacts on our lives, and understanding their economic aspects can help us navigate and make better decisions.
Economics provides a framework to analyze incentives, costs, and benefits. Applying this framework to love and relationships can provide valuable insights into how individuals make choices, allocate resources, and shape their lives.
Additionally, studying the economics of love allows us to examine broader societal trends, such as income inequality, gender roles, and social mobility. It helps us understand how economic forces intersect with personal relationships, shaping our social structures.
What to expect in this series
Throughout this series, we'll dive deeper into various topics within the economics of love, exploring theories, research findings, and real-life examples. We'll discuss concepts like two-sided matching models, the influence of income and education or societal status in partner selection, the economic considerations in marriage and divorce, and much more.
Whether you're curious about the economic factors that affect dating apps or interested in the economic consequences of divorce, this series aims to provide a fairly comprehensive understanding of the economics of love.
Limitations and disclaimers
Limitations of the economics approach
The economics approach has several limitations that we should acknowledge. While economics provides valuable tools for analyzing human behavior, it is just one lens among many. Relationships are complex, influenced by emotions, cultural norms, and individual psychology—factors that often resist empirical measurement.
The neoclassical Anglo-Saxon tradition of economics may emphasize certain rational and self-interested assumptions. These assumptions can clash with the messy and emotional realities of love, relationships, and other human interactions. While it is sometimes possible to incorporate some of these aspects into theoretical models, as Becker himself also did, economists generally don't focus on those because they are hard to measure empirically.
Inclusivity and diversity
Lastly, I want to address the original focus of the literature we'll be exploring and the terminology used, especially in older works. Gary Becker's seminal analysis primarily concentrated on marriage, a lens through which family and partnership dynamics were viewed in the past. Societal norms and our understanding of relationships have evolved significantly since then. Certain statements in Becker's older papers might seem outdated and anachronistic by today's standards.
The language and concepts I use might often align with the traditional heteronormative perspective prevalent in the literature. However, love knows no boundaries, and I want to emphasize that the principles discussed can be extended to relationships of all gender identities and sexual orientations. While the literature might not always reflect this diversity, my intention is to promote an inclusive dialogue.
Up next
In the next post, we'll explore the concept of dating and marriage markets and introduce two-sided matching models. If this topic intrigues you, subscribe to stay updated on future posts in this series. I’d also love to hear your thoughts—how do you see economics influencing relationships in your own life? Let’s start a conversation.
References
Becker, Gary, "A Theory of Marriage: Part I," Journal of Political Economy, Vol. 81, No. 4, 1973, pp. 813-846.
Becker, Gary, "A Theory of Marriage: Part II," Journal of Political Economy, Vol. 82, No. 2, 1974, pp. S11-S26.
Chiappori, Pierre-André, "Gary Becker's Contributions to the Economics of Matching and Marriage," Journal of Demographic Economics, 81, 2015, pp. 7–11.
Nayberg, Yevgenia, "How Marriages Are Exacerbating Income Inequality," KellogInsight, April 1, 2023, available at https://insight.kellogg.northwestern.edu/article/marriage-choices-income-inequality.