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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.

Suggested Citation

  • Do, Q-T & Iyer, S. & Joshi, S., 2006. "The Economics of Consanguinity," Cambridge Working Papers in Economics 0653, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:0653
    Note: DE

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    References listed on IDEAS

    1. 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 666-677, August.
    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. 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 1804-1825, September.
    4. 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.
    5. Maristella Botticini & Aloysius Siow, 2003. "Why Dowries?," American Economic Review, American Economic Association, vol. 93(4), pages 1385-1398, September.
    6. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-298, April.
    7. Rosenzweig, Mark R & Stark, Oded, 1989. "Consumption Smoothing, Migration, and Marriage: Evidence from Rural India," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 905-926, August.
    8. Michael Peters & Aloysius Siow, 2002. "Competing Premarital Investments," Journal of Political Economy, University of Chicago Press, vol. 110(3), pages 592-608, June.
    9. Eliana La Ferrara, 2003. "Kin Groups and Reciprocity: A Model of Credit Transactions in Ghana," American Economic Review, American Economic Association, vol. 93(5), pages 1730-1751, December.
    10. Francis Bloch & Vijayendra Rao, 2002. "Terror as a Bargaining Instrument: A Case Study of Dowry Violence in Rural India," American Economic Review, American Economic Association, vol. 92(4), pages 1029-1043, September.
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    Cited by:

    1. Quy-Toan Do & Sriya Iyer & Shareen Joshi, 2013. "The Economics of Consanguineous Marriages," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 904-918, July.
    2. Barbara Cavalletti & Corrado Lagazio & Daniela Vandone & Elena Lagomarsino, 2012. "The role of financial position on consumer indebted-ness. An empirical analysis in Italy," DEP - series of economic working papers 8/2012, University of Genoa, Research Doctorate in Public Economics.

    More about this item


    Marriage; consanguinity; dowry; credit constraints;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • I1 - Health, Education, and Welfare - - Health
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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