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A theory of the competitive saving motive

  • Du, Qingyuan
  • Wei, Shang-Jin

Motivated by recent empirical work, this paper formalizes a theory of competitive savings — an arms race in household savings for mating competition that is made more fierce by an increase in the male-to-female ratio in the pre-marital cohort. Relative to the empirical work, the theory can clarify a number of important questions: What determines the strength of the savings response by males (or households with a son)? Can women (or households with a daughter) dis-save? What are the conditions under which aggregate savings would go up in response to a higher sex ratio? This theory can potentially help to understand the savings patterns in China, India, Vietnam, Singapore, Hong Kong, and other economies that have experienced a dramatic increase in the pre-marital sex ratio.

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Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 91 (2013)
Issue (Month): 2 ()
Pages: 275-289

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Handle: RePEc:eee:inecon:v:91:y:2013:i:2:p:275-289
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505552

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