Economics of Romance

In the immortal words of Haddaway, “What is love?” Despite being in bed all of Tuesday, and not being up-to-the-task of teaching Wednesday, I mustered enough energy to talk with the Economics Club at FSU about the “Economics of Romance”.

In that talk, I started with some good economics jokes — some of which can be found here. Skipped some really bad economics pick-up lines, and waxed about the dangers of thinking at the margin in a world that thinks about levels. For example, the next time your spouse asks whether the presentation you’re writing is more important than them …. well, don’t try to explain marginal thinking to them.

We talked about economics and romance in popular culture. For example, we delved into the lyrics in Beyonce’s Single Ladies and Irreplaceable. “If you like it then you better put a ring on it” is a great example of the signaling value of the diamond ring. “If you don’t, you’ll be all alone.” She’s thinking at the margin, she won’t fall victim to the sunk cost fallacy, and will kick you to the curb. From the song “Irreplaceable”, “I’ll find another you in a minute.” There are many substitutes so my demand for you is elastic.” Shout out to Charity-Joy Acchiardo and Ninos Malek’s “Dismal Dating” paper.

We also discussed Seinfeld and Spongeworthiness as well as whether men are overconfident and overestimate the arrival of a match when they are “thinking at the margin” and decide to dump their girlfriend (e.g. the Legally Blonde and American Pie series).

After the pop culture and jokes we dove into something of more significance. In recent posts on this blog, I have discussed the marriage market and how gender imbalance leads to different equilibrium outcomes in the marriage market. One major setting of gender imbalance most students are familiar with is the college campus. In one of the textbooks I use for my Economics of the Family and Religion class (Women and the Economy), the authors note,

“On US college campuses, women have gone from being underrepresented to overrep-resented. When many traditionally all-male colleges first admitted women in the 1960s, men outnumbered women by as much as five or ten to one. Currently, women substantially outnumber men on most college campuses as a result of the gender gap in higher education favoring women. At this particular life stage, marriage isn’t the critical issue, but we could reinterpret the model in terms of dating behavior. Would women be treated better when the sex ratio was in their favor than when it favored the men? That’s roughly the equivalent of a high [share of benefits to women] in our model.”

Then the authors ask, “What will happen in the 2010s when women substantially outnumber men on most college campuses?” Well, there have been some studies on this. Most notably from sociologists Jeremy E. Uecker and Mark D. Regnerus titled, “Bare Market: Campus Sex Ratios, Romantic Relationships, and Sexual Behavior” where the authors note that sex ratios on college campus are related to prevailing dating culture. To reduce squinting at graphs and put the idea more succinctly, I borrowed the following from that are cited in the book Date-onomics:

Georgia Tech (34 percent women, 66 percent men): “Tech is a fairly monogamous campus … [F]or the most part, people like to be in relationships.”

University of Michigan (50 percent women, 50 percent men): “If you’re seeking a relationship, chances are you’ll find the person you’re looking for.”

University of Florida (58 percent women, 42 percent men): “[I]n most circles, there isn’t exactly a prejudice against more random-hook ups.”

Sarah Lawrence College (75 percent women, 25 percent men): “[T]he girls complain about loneliness, the guys get more than they can handle … and mindless, one-night stands are rampant.”

The power of thinking about romantic relationships in terms of markets comes from the comparative static predictions of the model. From what I’ve been able to gather, the economic models do quite well in explaining the college campus setting. But, I would like to see more work.

We moved on to discussing other topics like the idea of “marital search” and increased use of online dating sites in the search for romantic relationships. The discussion was good and after talking with my class about the subject, and the students who attended the Economics Club talk, I get the feeling that the use of online dating is an uneasy equilibrium for many students. A topic for a later post.

Happy Valentine’s Day to everyone out there.

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