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The Economics of Consanguinity

  • Do, Q-T
  • Iyer, S.
  • Joshi, S.

The institution of consanguineous marriage - a marriage contracted between close biological relatives - has been a basic building block of many societies in different parts of the world. This paper argues that the practice of consanguinity is closely related to the practice of dowry, and that both arise in response to an agency problem between the families of a bride and a groom. When marriage contracts are incomplete, dowries transfer control rights to the party with the highest incentives to invest in a marriage. When these transactions are costly however, consanguinity can be a more appropriate response since it directly reduces the agency cost. Our model predicts that dowry transfers are less likely to be observed in consanguineous unions, and that close-kin marriages are more prevalent at both extremes of the wealth distribution. An empirical analysis using data from Bangladesh delivers results consistent with the predictions of the model, lending strong support to our theory.

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File URL: http://www.econ.cam.ac.uk/research/repec/cam/pdf/cwpe0653.pdf
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Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0653.

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Length: 26
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:cam:camdae:0653
Note: DE
Contact details of provider: Web page: http://www.econ.cam.ac.uk/index.htm

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  1. Maristella Botticini & Aloysius Siow, 2000. "Why Dowries?," Econometric Society World Congress 2000 Contributed Papers 0200, Econometric Society.
  2. Junsen Zhang & William Chan, 1999. "Dowry and Wife's Welfare: A Theoretical and Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 786-808, August.
  3. La Ferrara, Eliana, 2003. "Kin Groups and Reciprocity: A Model of Credit Transactions in Ghana," CEPR Discussion Papers 3705, C.E.P.R. Discussion Papers.
  4. Bloch, Francis & Rao, Vijayendra, 1999. "Terror as a Bargaining Instrument : A Case-Study of Dowry Violence in Rural India," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1999020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  5. Vijayendra Rao, . "The Rising Price of Husbands: A Hedonic Analysis of Dowry Increases in Rural India," University of Chicago - Population Research Center 91-6, Chicago - Population Research Center.
  6. Michael Peters & Aloysius Siow, 2001. "Competing Premarital Investment," Working Papers peters-01-02, University of Toronto, Department of Economics.
  7. Shareen Joshi, 2004. "Female Household-Headship in Rural Bangladesh: Incidence, Determinants and Impact on Children's Schooling Shareen Joshi," Working Papers 894, Economic Growth Center, Yale University.
  8. Rosenzweig, Mark R. & Stark, Oded, 1987. "Consumption Smoothing, Migration and Marriage: Evidence from Rural India," Bulletins 7515, University of Minnesota, Economic Development Center.
  9. Abhijit V. Banerjee & Andrew F. Newman, 1990. "Occupational Choice and the Process of Development," Discussion Papers 911, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  10. Hanan G. Jacoby & Ghazala Mansuri, 2010. "Watta Satta: Bride Exchange and Women's Welfare in Rural Pakistan," American Economic Review, American Economic Association, vol. 100(4), pages 1804-25, September.
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