Tuesday, 26 April 2016

The Market Of Dating & Mating

I stumbled on an article today that claims poorer couples are more likely to divorce than richer ones. The writer suggested a few reasons why this may likely be the case:

"Are poorer couples more likely to divorce because money problems put pressure on their relationships? Because they don't have access to the kind of marriage counselling available to richer couples? There's another possibility, too — Stevenson and Isen found that college-educated women are less likely to believe "financial security is the main benefit of marriage." So are less-educated, potentially lower-income women entering marriage more out of financial necessity than actual compatibility, then facing the cruel irony that they're more likely to divorce, leading to more financial insecurity?"

I don't see why - one argument is that rich people may have more at stake in terms on equity, but they equally will have financial security after the equity has been divided up. Are those the reasons most likely? Possibly, but perhaps they need to think a bit more deeply. Given that on average richer people tend to be the higher earners, and higher earners tend to be people with high intelligence, it is probable that in terms of the dating market, richer people are more saleable commodities, and thus may end up in higher quality marriages (part of this may need to be offset by the likelihood that such people would also fare better in the dating world post-divorce too, so may not feel so inclined to stay in bad marriages).

Or it could be that richer, smarter people are more discerning about choosing their beloved, particularly as they tend to marry later in life. Perhaps richer people are better equipped to negotiate those difficult patches in marriages than poorer people. Finally, given that in richer couples' marriage there is a higher probability that the women is educated, it is perhaps the case that the marriage is stronger by virtue of the fact that both partners hold a strong position in the marital decision-making.

The Economics of Dating
The market of dating is like the financial market in that it consists of buyers and sellers (the prime difference being that in the dating market buyers are also sellers and sellers are also buyers). Such markets would only be in equilibrium with an optimal adjustment of prices that enabled all participants to trade.

Consider saleability in terms of A-Z, where As are the most desirable (looks, character, education, intelligence, humour, earnings, sexual charisma, etc), Bs the second most desirable, right down to Zs, the least desirable. Say a B comes onto the market - he or she is going to be an 'expensive' proposition in terms of value in the buyers' market, because many buyers will be competing for that B.

After a cleared market you will find that, save for various exceptions, As, Bs and Cs tend to end up with other As, Bs and Cs, and so on. This is what they call assortative mating. It doesn't always turn out that way - but on average the probability that it will is compelling.

Let's simplify it by just looking at age - particularly in relation to the myth that 'men going for women half their age' is quite widespread. The likelihood is that it isn't. For a man to successfully couple up with someone half his age either he must have something worth selling (often money or high intelligence), or she will probably have not much worth buying.

Please understand these economic terms are not to treat people as commodities - they are illustrations for what is happening in the real world. If you're 25 and quite expensive in the buyers' market (i.e. a good catch) you're going to be looking for someone in your age range, unless you'll be prepared to compromise that for, say, an older gentlemen with higher earnings or high intelligence. If you're 25 and quite inexpensive in the buyers' market, you may settle for someone twice your age who is slightly more of a catch than the sellers in your age range. But these are more the exception than the rule: most people are not dating people half their age - and those that are will be people who have become or remained expensive in the dating market.

I read a similar report in the Guardian about a year ago, in which the columnist postulated that the rise of Internet dating was causing an increase in divorce and relationship breakdown because it was now so much easier to find someone other than your partner. While it may be true in a limited number of cases, overall it's very likely that the opposite is true - online dating is more than likely reducing the number of divorces and improving the quality of relationships.

Here's why. Where are you more likely to find a job - in a city or in a small village? Obviously it's a city because there are more vacancies in your increased search space. The introduction of online dating is a bit like moving from a village to a city - suddenly numerous possibilities open up as the number of prospective partners increases and access to them also improves.

To put it in market terms, the search costs go from low to high. People confined to jobs, dating or trading in their local village are going to have lower quality jobs, dates and goods because villages lack the multiplicity of choices that cities have. In a city you can afford to be more discerning and more patient as you take your time meeting lots of different people to find a high quality match. You are less likely to settle for a less-than-optimum choice of partner because the search costs are low. Thanks to the Internet, search costs just got even lower, which increases your chances of finding a more suitable partner, thus increasing the likelihood of a higher quality relationship and reducing the number of divorces or break-ups.