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Chapter 3 of Logic of Life: Many Could Have Been Mrs. Rojas, but There is Only One Mrs. Rojas
This review is cross posted at the orgtheory.net, the management and social science blog.
In chapter three, "Divorce is Underrated," Tim Harford explores the economics of love, marriage, and divorce. It’s the kind of topic that makes people hate economists. Of all the subjects studied by economists, can’t love be spared the rational choice treatment? Of course not! If you spend a few moments thinking about how men and women scheme in the dating world, you’ll quickly see that a rational choice theory of relationships isn’t such a crazy idea after all.
Harford hits the major points you’d expect. People make substitutions, and they respond to supply and demand in dating and sex. One interesting section talks about the “optimal” divorce rate and how in the post-1970s era, we’re probably switching from a situation of many marriages with many divorces, to less frequent marriages and less frequent divorce. Harford quotes MR regular Justin Wolfers in saying that there is social learning and that we should appreciate that the optimal divorce rate is not zero, lest we believe in perfect marriages.
The average person probably hates this econo-talk because it seems to devalue love. Here’s where it helps to be a sociologist. Yes, from the bird’s eye view, there is a “love market” and you are just a love widget. But let’s take the symbolic interactionist perspective. Relationships are highly customizable. Once you bond with a person, you can make the relationship highly unique and hard to substitute. Even if two people are similar, they can form very different relationships with different histories. If you’ve done that, then you’ve created a fairly unique thing that’s hard to replace. By yourself you might be generic, but in a relationship you can be very special.
Translating back into econo-talk, people in loving relationships differentiate their “love product.” A person in a couple with a special history knows that there will never be another person who has lived the same life with them. That knowledge makes them stick it out. If you can do that in a way that improves both parties, then you won’t contribute to the optimal divorce rate.
Posted by Fabio Rojas on February 2, 2008 at 12:03 AM in Books | Permalink
Comments
lol, Mr Rojas, I see you've posted this at 12:03 am on a Friday night (sat morning).
Why perpetuate the stereotyping of academics? Time to enjoy a night out!
Posted by: Tushar at Feb 2, 2008 1:02:39 AM
It's more a stereotype of being a sleep deprived dad!!!
Posted by: Fabio Rojas at Feb 2, 2008 1:13:23 AM
Many researchers point out that there's a solid correlation between single-parenthood
and low-performing children. Is this not a negative externality of divorce?
Just wondering.
Posted by: Tushar at Feb 2, 2008 1:42:22 AM
Those low-performing children could be negative externalities of unhappy relationships.
Posted by: John Mark Rozendaal at Feb 2, 2008 2:34:11 AM
Last comment is right on with me - in fact, given that this lower peformance is partly (maybe mostly) induced by the psychological
effects of abuse and stress, especially within a severely dysfunctional living environment, then my guess is that these adverse
manifestations are more common and ever-growing amongst such families that "stay together".
Posted by: TomG at Feb 2, 2008 6:13:36 AM
Posted by: ilanlar at Feb 2, 2008 7:57:13 AM
Thank you, Fabio. The chapter also contains my favourite bit of research, by Michele Belot and Marco Francesconi, on speed-dating. It is not the most important paper in the book by a very long way, but it's such a lot of fun. I love the idea of these economists studying speed-dating and concluding that people adjust very quickly to market conditions. A nice bit of light relief, sandwiched between drug addiction and divorce.
I am about to fly home to London from Toronto but will take a look at the discussion when I get home. Thanks to all MR readers for their contributions, it's a privilege to be being scrutinised so closely.
Posted by: Tim Harford at Feb 2, 2008 8:16:58 AM
"If you’ve done that, then you’ve created a fairly unique thing that’s hard to replace. By yourself you might be generic, but in a relationship you can be very special."
Is that an endowry effect?
Posted by: Michael Stack at Feb 2, 2008 8:56:01 AM
Hartford is correct to note that the divorce rate is more a function of economic changes than of legal changes, and of course there is an "optimal" divorce rate -- just as there is an optimal accident rate -- but his overall analysis strikes me as being Panglossian: he seems to imply that we live in the best of all possible worlds regardless of how low or high the divorce rate actually is
Posted by: enrique at Feb 2, 2008 9:04:43 AM
The relevant econospeak is "Asset specificity." See Oliver Williamson's work on the labor employment relationship. Entirely relevant to marriage.
Posted by: jn at Feb 2, 2008 10:15:36 AM
Fabio, shame on you. Even people who don't get divorced contribute to the optimal divorce rate! :)
Posted by: Alex Tabarrok at Feb 2, 2008 10:22:12 AM
I would be interested to know what the longer term implications are for black Americans given that black women are becoming more educated and skilled and perhaps concentrating resources on improving the lives of a fewer number of offspring. It would seem that positive changes should occur; namely the percentage and numbers of black men in jail would go down and that new positive equilibrium points would be established.
And what does the data look like for "arranged" marriages that are quite common in many cultures? Evem some that make up a fair percentage of the British population.
Posted by: Pitt at Feb 2, 2008 11:39:31 AM
One point I should make about this chapter is Tim Harford’s casual comment on p 79 that ‘despite his travels, Adam Smith never actually visited a pin factory’.
This is in stark contrast to what Smith writes in Wealth Of Nations in the paragraph introducing the division of labour in the pin factory: “I have seen a small manufactory of this kind in where ten men only were employed, and where some of them consequently performed two or three distinct operations.’ (WN I.i.3. p 15)
Following exchanges with Tim Harford he stated that he took the assertion of Adam Smith not visiting a pin factory from the usually reliable David Warsh in his ‘Knowledge and the Wealth Of Nations’ 2006: ‘Much stress has been laid over the years on the significance of the description of the pin factory. In fact Smith never visited one.’ (p 40)
David Warsh has since published his account of the background to his unintentional his error: ‘Did He or Didn’t He? (He Did!’): http://kwonbook.com/2008/01/20/did-he-or-didnt-he-he-did/ and concludes: ‘Whether my error is serious or trivial depends on the business you are in. It is, I suppose, a calumny on Smith to say that he never saw to a pin factory, even if in the same breath I gave him credit for getting out and around. Certainly I deeply regret the error.’
That Smith took the details of an 18-man pin factory from Diderot’s Enclyopaedia (1755) is not in dispute but, unless he was lying, he did visit one, of which there were many scores of them in Britain, including Scotland, at the time he was teaching in Glasgow (1751-63).
The lesson I suggest we take from this episode is that when we quote from Adam Smith we at least take the necessary precaution of checking Wealth Of Nations first and we avoid relying only on secondary sources.
Posted by: Gavin Kennedy at Feb 2, 2008 12:06:03 PM
what does "optimal rate" of accidents mean?
Posted by: at Feb 2, 2008 12:32:15 PM
Harford alluded that black males that are not in prison could be having more sex as a result of so many black men in prison. (could this be called a "positive externality?")
Do you guys have any ideas on how I can measure this? My first inclination was to compare STD rates, or look at condom sales volume in different communities...but I'd like to know what you guys think.
Posted by: Biomed Tim at Feb 2, 2008 12:40:37 PM
By optimal rate of accidents, I mean that there is a point at which an extra dollar invested in safety buys less than a dollar's reduction in accident costs. See Guido Calabrsi's "Costs of Accidents"
Posted by: enrique at Feb 2, 2008 7:48:26 PM
Optimal rate of accidents means just what it sounds like. That if we were to reduce the number of accidents in society, the costs of doing so would exceed the benefits to society. Think of there being a million accidents a year. Maybe going from a million to 990,000 would just require putting traffic lights at every corner. But going from 10,000 to 0 would require an infinite cost. To actually get that accident rate down to zero would be too costly to justify doing it, in other words. Same goes for the idea of an "optimal level of pollution."
Posted by: jason voorhees at Feb 2, 2008 10:05:02 PM
One thought I had while reading the commentary was that the more interesting economic decision regarding marriage and divorce is not the consumption decision of whether to stay together, but the investment decision of how much effort to put into building a positive shared history and creating a better differentiated "product." Some differentiation happens by accident as a byproduct of two people being compatible, but it's likely that a lot of it requires that at a given moment at least one partner is not maximizing short run utility (or even long run utility prior to considering the value of investing in the relationship).
Posted by: Telnar at Feb 3, 2008 8:23:01 AM
This was my favorite chapter in an overall phenomenal book.
The speed dating study was well reported, though I'm not surprised by the lowering of standards. It was noted that if no offers are extended, a speed date participant is invited back at no cost. First off, allow me to complement Tim for not inferring the second try was "free". However, I would expect people that fail on the first pass will be quite disillusioned and never take up the offer. Perhaps I should give a read to the referring paper...
Also, I discussed female competition with a friend and noticed one of my favorite Harford topics was not mentioned. Were there no applicable studies on exogenous beauty? Where are the plastic surgery capitals of the world and do they correlate with territories of high education?
The map linked to my name shows that US singles populations are heavily female on the East coast and heavily male on the west coast. We should then expect to see higher female education levels in the east and higher female bargaining power in the west. To test this, what may be good ways to measure female bargaining power?
Posted by: Erich at Feb 3, 2008 11:37:31 AM
"Were there no applicable studies on exogenous beauty?"
Are plastic surgeries considered exogenous or endogenous?
From Dear Economist:
More recently, economists have discovered evidence that endogenous beauty (make-up, hair-styling) is as important as exogenous beauty (having Bond girl Eva Green’s eyes).
Economists Daniel Hamermesh, Xin Meng and Junsen Zhang have found that spending money on clothes and make-up slightly raises the earnings of Shanghai workers. More recently Jayoti Das and Stephen DeLoach, of Elon University’s economics department, have shown that time spent on grooming substantially improves wages, especially for men.
Posted by: Biomed Tim at Feb 3, 2008 3:33:28 PM
Thank you Biomed Tim,
I do not have the time to read those papers, but I'd suspect that certain personality traits (aka the Big 5) are correlated with attention to personal appearance and workplace success.
In my question about exogenous beauty, I'm hoping to find or drive to the next level of research in this area. Perhaps I'll have to wait for a future Undercover Economist to follow up on this angle.
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Posted by: 深圳翻译公司 at Feb 23, 2008 8:59:34 AM
Step families have been shown to increase alcoholism in adolescents 20%
Posted by: Chuck Hayward at Nov 22, 2008 6:38:11 PM
Fabio, shame on you. Even people who don't get divorced contribute to the optimal divorce rate
Posted by: firma ekle at Apr 18, 2009 7:03:35 AM
