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Why Dowries?

  • Maristella Botticini
  • Aloysius Siow

Parents transfer wealth to their children in many ways. The dowry is distinctive because it is a large transfer made to a daughter at the time of her marriage. In an insightful essay, Goody (1973) proposed that the dowry is a premortem inheritance to the bride. A daughter obtains a wealth transfer from her parents as her dowry whereas a son obtains his as a bequest. His observation has been confirmed in different dotal (dowry giving) societies. We develop a theory of dowries that explains his observation. Our work builds on Becker's seminal research on marriage markets and the research program on economics of the family (Rosenzweig and Stark 1997). We argue that in virilocal societies, where married daughters leave the parental home and their married brothers do not, altruistic parents use dowries and bequests to solve a free riding problem between siblings. In virilocal societies, married sons continue to work with the family assets after their marriage. If married daughters share in the parents' bequests, the sons will not get the full benefits of their efforts in extending the family wealth. Thus they will supply too little effort. In order to mitigate this free riding problem, altruistic parents give bequests to sons and lump sum payments to daughters. The model predicts that dowry contracts, which may be complicated, should not contain claims on shares of income generated with the family assets. A theory of dowry has to explain its disappearance in previously dotal societies. As the labor market becomes more developed, as the demand for different types of workers grow, children are less likely to work in the same occupation as their parents. They are also less likely to work for or live with their families. The use of bequests to align work incentives within the family becomes less important. Since it is costly to pay a dowry, the demand for dowry (within the family) will fall as the need to use bequests exclusively for sons to align work incentives falls. Inst

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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 93 (2003)
Issue (Month): 4 (September)
Pages: 1385-1398

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Handle: RePEc:aea:aecrev:v:93:y:2003:i:4:p:1385-1398
Note: DOI: 10.1257/000282803769206368
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  1. Maristella Botticini & Aloysius Siow, 1999. "Why Dowries?," Boston University - Institute for Economic Development 95, Boston University, Institute for Economic Development.
  2. Michael Peters & Aloysius Siow, 2000. "Competing Pre-marital Investments," Working Papers peters-00-01, University of Toronto, Department of Economics.
  3. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
  4. Ted Bergstrom, . "Primogeniture, Monogamy, and Reproductive Success in a Stratified Society," Papers _025, University of Michigan, Department of Economics.
  5. Pierre-André Chiappori & Bernard Fortin & Guy Lacroix, 2001. "Marriage Market, Divorce Legislation and Household Labor Supply," CIRANO Working Papers 2001s-16, CIRANO.
  6. Siwan Anderson, 2003. "Why Dowry Payments Declined with Modernization in Europe but Are Rising in India," Journal of Political Economy, University of Chicago Press, vol. 111(2), pages 269-310, April.
  7. Kahn, Shulamit & Lang, Kevin, 1988. "Efficient Estimation of Structural Hedonic Systems," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 29(1), pages 157-66, February.
  8. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1985. "The Strategic Bequest Motive," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1045-76, December.
  9. Botticini, Maristella, 1999. "A Loveless Economy? Intergenerational Altruism and the Marriage Market in a Tuscan Town, 1415–1436," The Journal of Economic History, Cambridge University Press, vol. 59(01), pages 104-121, March.
  10. Daniel A. Ackerberg & Maristella Botticini, 1999. "Endogenous Matching and the Empirical Determinants of Contract Form," Papers 0096, Boston University - Industry Studies Programme.
  11. Rao, Vijayendra, 1993. "The Rising Price of Husbands: A Hedonic Analysis of Dowry Increases in Rural India," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 666-77, August.
  12. Aloysius Siow & Xiaodong Zhu, 1998. "Differential Fecundity and Gender Biased Parental Investment," Working Papers siow-99-03, University of Toronto, Department of Economics.
  13. Brown, Judith C. & Goodman, Jordan, 1980. "Women and Industry in Florence," The Journal of Economic History, Cambridge University Press, vol. 40(01), pages 73-80, March.
  14. Edlund, Lena, 1997. "Dowry Inflation: A Comment," SSE/EFI Working Paper Series in Economics and Finance 193, Stockholm School of Economics.
  15. David Lam, 1988. "Marriage Markets and Assortative Mating with Household Public Goods: Theoretical Results and Empirical Implications," Journal of Human Resources, University of Wisconsin Press, vol. 23(4), pages 462-487.
  16. Luporini, Annalisa & Parigi, Bruno, 1996. "Multi-Task Sharecropping Contracts: The Italian Mezzadria," Economica, London School of Economics and Political Science, vol. 63(251), pages 445-57, August.
  17. Gillian Hamilton & Aloysius Siow, 2007. "Class, Gender and Marriage," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(4), pages 549-575, October.
  18. Cole, Harold L & Mailath, George J & Postlewaite, Andrew, 1992. "Social Norms, Savings Behavior, and Growth," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1092-1125, December.
  19. Brandt, Loren & Hosios, Arthur J, 1996. "Credit, Incentives, and Reputation: A Hedonic Analysis of Contractual Wage Profiles," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1172-1226, December.
  20. Bartik, Timothy J, 1987. "The Estimation of Demand Parameters in Hedonic Price Models," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 81-88, February.
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