Tuesday, November 17, 2009

The Costs and Benefits of Married Life

Paul Fritjer's work is summarized in this article (Hat Tip: Pavel Yakovlev):

WHAT'S a marriage worth? To an Aussie male, about $32,000. That's the lump sum Professor Paul Frijters says the man would need to receive out of the blue to make him as happy as his marriage will over his lifetime. An Aussie woman would need much less, about $16,000.

But when it comes to divorce, the Aussie male will be so devastated it would be as if he had lost $110,000. An Aussie woman would be less traumatised, feeling as if she had lost only $9000.

For fun, take the points at face value:

So, a man who marries and divorces would be worse off on net by an estimated $78,000 than if he never married at all, whereas a woman would remain better off still from having been married by a $7,000 margin. In a utilitarian sense, this is a $71,000 loss to social welfare arising from marriages occurring that result in divorce.

There should be a bargaining opportunity to arbitrage away this difference, where a man should be able to bribe his would be ex-wife into remaining. This willingness to bargain though might be individually rational but collectively problematic for men in a rent-seeking sense.

2 comments:

Anonymous said...

It was very interesting for me to read the article. Thanks for it. I like such topics and anything that is connected to them. BTW, try to add some pics :).

petrenkov said...

It was rather interesting for me to read the post. Thank you for it. I like such themes and anything connected to them. I definitely want to read a bit more soon.

Best wishes
Steave Markson