Can Population Growth Cause Dowry Inflation? Theory and the Indian Evidence

The empirical evidence on the role of a demographic marriage squeeze in the Indian dowry inflation of the last century has been mixed. Moreover, Anderson (2005) argues in a theoretical setting, that a population growth-led marriage squeeze must cause dowry deflation if the spousal age gap is to narrow over time. In this paper, I show that the apparently contradictory findings of the economic literature are perfectly consistent with each other. I demonstrate, using Anderson’s theoretical framework, that a demographic squeeze may lead to higher dowries in the periods of the squeeze compared with periods of no squeeze. Furthermore, I show that data drawn from such a dowry path can replicate the results obtained in the empirical literature on the Indian dowry inflation. I conclude that a demographic marriage squeeze remains a plausible explanation for the Indian dowry inflation.