Thursday, September 30, 2010

The Economics of Courtship - Part 1 - The Two Tiered Market

I've decided that much of romance, courting, marriage, blah blah blah, seems to confuse a lot of people on both sides of the dating game. And I'm only half-jesting when I say this, but just some basic economics goes a long way in explaining the different phenomena we see in the courting/dating world. And it is because of this, I've decided to write a yet-to-be-determined number of pieces of the economics of courtship in that I've already come up with three and thought it might be worth writing about.

Today's topic is the "Two Tiered Market."

I cannot claim to have been the original observer of this phenomenon, it may have been Roissy, but it I think it was somebody perhaps a little less visceral (if anybody knows, please send the link my way), regardless, it was the observation that women in their late 20's to about their 40's believe or associate sex with marriage. Or, more specifically, that if they have sex with a man, they believe that is a representation or a proxy for his level of interest in marriage.

Now, again, when we delve into the courting world there are no databases, there are no records kept and so it largely goes based on anecdotal evidence and experience, but I would say not ALL women obviously fall for this, but some certainly do. So as a favor to them, not to mention codify this theory, permit me you this graph (I love that phrase);



What we have here is a classical supply and demand chart of two markets; the sexual market and the marriage market.

In the first market we have the demand for sex (presumably from men) and the supply of sex (presumably women) - (the roles actually do not matter as to who is the buyer and who is the supplier, you could switch them if you wanted, as long as you are consistent amongst both markets, you will get the same results). In general, men demand sex more than women. Yes, horribly politically incorrect of me, I know. Send the Speech-Police's best sniper after me, in the mean time it does not change the fact that it is true, so my death will avail nothing and no one. In any case, demand is high and relatively inelastic.

Also, in general, women in their late 20's to 40's are more or less over that initial fear or discomfort with sex. They are more comfortable with it, they certainly aren't just going to go willy nilly offering it all over the place, but their supply curve is what I would consider normal (yes, send in the Politically Correct Assassins).

The point where the two meet is the equilibrium point, where if you were paying atttention in high school economics, is the "price" you pay for sex - denoted by P,s. In this metaphorical example it would be dinners men must take women out on, gas, psychological issues, the time dedicated to it, etc. etc.

Now notice the line, P,s, goes across to the other market, the marriage market.

The reason it does this is SOME women think that because a man has sex, that he is now interested in marriage. When in reality they are TWO SEPARATE AND DISTINCTLY DIFFERENT MARKETS. TWO SEPARATE AND DISTINCTLY DIFFERENT "GOODS AND SERVICES" AS THE ECONOMIC TERM IS.

However, in assuming sex=marriage, this brings about an economic phenomenon known as a "price floor." Meaning you cannot charge BELOW a certain price, or "below the floor." This is why P,s is carried over to the marriage market on that green line.

In the marriage market, women also supply marriage. For the ages of late 20's to 40's, women, in general, are more than willing to supply a LOT of marriage. But with this sex-induced psychological floor, they are led to believe that demand is much higher than it actually is (see line D,m to realize that men of equivalent marrying age do not demand marriage ANYWHERE NEAR as much as they demand sex, resulting in a free market price of marriage that is very low, P,m).

Now, because there is an effective price floor, this results in a price that is "too high." At that lofty price very few men are willing to demand or pay for a marriage. Whereas at that very high price, women are MORE THAN WILLING to supply it. This results in what economists call a "surplus"-denoted by the gray "Surplus, m."

A surplus of what? A surplus of women in the marriage market.

This is why I fear for (and have genuine pity for) women who mistake sex for marriage or at least perhaps more realistically, love and affection that may lead to marriage. It may not be seen too frequently in the late 20's as most men at that age are still willing to get married, but no doubt you know of some guy in his 40's who is dating some woman who "just won't commit."

Well, there you go, in economic-charty-goodness no less.

And that's, frankly that. I have nothing more to really add to it, because, well , it's economics. It's kind of cut and dry.

16 comments:

Stew Magoo said...

You have to be kidding.

I'm going to go have sex now...

Norman said...

Can you cover this one in your next installment..."You can't sell the cow when you're giving the milk for free."

Aeroguy said...

I love it, there are other ways you can play with those same basic graphs. For price, we can use attractiveness (in a general sense, looks, money, intellect) of prospective partners. Thus for sex women can have sex with men that are much more attractive then them but for marriage they have to find a man who is significantly less attractive than the men she usually sleeps with.

Captain Capitalism said...

Hi Norman,

That would actually be pretty easy with a discounted cash flow model.

However, we could also use price to rents or price to earnings ratios and it would have to start incorporating substitute goods and complimentary goods.

Rosalys said...

I can't disagree with what you are saying. It's what former generations always knew and why a smart woman who wants to get married should NEVER have sex without marriage. Girls who move in with their "partners" (I HATE that term) are stupid, stupid, STOOPID!!!!!! But try telling your know it all offspring. Try telling her that in a few short years she will start aging while Prince Charming will acquire an air of distinction along with his graying temples along with a growing bank account; which means when the inevitable break up occurs she will be left desperately out in the cold while he could easily have a new idiotic blond half her age within 24 hours! The "liberated woman" is the best thing that ever happened to men! Except that it isn't because it leads to emptiness later on in life when it's too late. The only upside to this is that maybe, just maybe Mom, who at this moment is dumber that a box of rocks, will in about 10 years will be viewed with a little more respect for her common sense - if not wisdom.

Poutine said...

Wall street guy explains to wannabe golddigger why 'buying' her is a bad deal, 'renting' makes economic sense. As seen in the 'best of' section of Craigslist

http://www.craigslist.org/about/best/nyc/445962092.html

money quote:
'So, in economic terms you are a depreciating asset and I am an earning asset. Not only are you a depreciating asset, your depreciation accelerates! Let me explain, you're 25 now and will likely stay pretty hot for the next 5 years, but less so each year. Then the fade begins in earnest. By 35 stick a fork in you!'

Eric said...

Poutine - There's a similar bash.org quote (http://bash.org/?868827 -- Not for the sensitive or easily offended) regarding Eliot Spitzer and his prostitute and Paul McCartney and his ex-wife, namely pointing that that in the sex vs. marriage case "renting" (paying a prostitute for sex) was better than "owning".

Anonymous said...

Rosalys/Norman. I would never marry a woman I hadn't slept with. However, any hint of a slutty past and her chances to wed me approach zero. Quite the conundrum women are faced with.


I do agree with you however, Roslys.

"Try telling her that in a few short years she will start aging while Prince Charming will acquire an air of distinction along with his graying temples along with a growing bank account; which means when the inevitable break up occurs she will be left desperately out in the cold while he could easily have a new idiotic blond half her age within 24 hours! "

The older I get, the larger the gap in age between myself and the women I date.

Ryan Fuller said...

It's almost enough to make you think that women who refuse to have sex before they get married might actually be playing their cards right, huh Captain?

For reference, I live in Utah. Lots of people around here opt not to have sex before they get married. Average age for men and women to get married nationwide is 26.7 and 25.1, but in Utah it's 23.9 for men and 21.9 for women.

Effectively, by not offering sex without marriage it turns the market for both into a single market, with a market clearing price determined partially by the male demand for sex (although women contribute) and the female desire for marriage (although men contribute there too). The end result is that people get married about three years earlier, and almost certainly start having sex a few years later compared to national averages as well.

I can see why you wouldn't want to date one of those girls, since bundling sex with marriage means a much higher cost for sex than you're willing to pay, but the impact on marriage as a social institution is pretty profound. Agree with it or not, it's an interesting comparison.

"...well , it's economics. It's kind of cut and dry."

Uhhh... I don't hear economics described that way very often. Far more often I hear interesting statements qualified by an endless stream of "on the other hand", "all other things being equal" or similar, at which point two economists will produce three opinions and mutually disagree with all of them.

Anonymous said...

Reputed advice from a rich father to his son, "If it flies, floats, or Fvcks, rent it".

Rosalys said...

Yes, Anonymous, it is a conundrum. "I won't marry a slut/neither will I marry someone without sleeping with her" In other words, you have no intension of ever marrying.

In some ways I don't blame you because it's tough on guys today. The courts are stacked against you and you can easily lose your kids, your house and half your income because your wife decided she has to "find herself". (Another phrase I hate! What do you mean "find yourself"? You're right where you are standing, you moron and you always will be. You can't get away from yourself - which I see can be a problem for some people, man or woman! But I digress!)

The "I deserve only the hottest of chicks at all times" mentality is as vacuous as the "girls just wanna (hafta) have fun" mentality. Both will find their ultimate end in an empty and meaningless life.

The problem is not just men or just women but a general lack of good character among the populous. There are good women out there if you look just as there are good men (I know because I have one of them!)

"Women play at sex to get love. Men play at love to get sex." Anyone can see that in this equation most men can get their sex but a woman often will not only not get what she seeks, which is love, but often receive contempt. So if the deck is stacked against men in the courts today, the deck has always been stacked against women.

If your primary qualification in a mate is centered only on appearance then you are as superficial a twerp as all those giggling Barbies out there!

Mark Adams said...

Utah might have a lower average first marriage age, but its divorce rate is 23rd in the country. Not sure EXACTLY what that means, but I'm pretty sure "you ain't all that special" is part of it.

Ryan Fuller said...

For you, Mark:

http://utahmarriage.org/htm/facts/linking-religion-divorce-rate-faulty/

Utah's divorce rate is about average when compared nationwide, but much below average when compared to non-Eastern states.

Divorce rates in Eastern states are lower than elsewhere in the country. In Eastern states, incomes are higher and marriage age is later. Utah is the biggest outlier in average marriage age, with below average per capita income (39th), but still finishes about average in divorce rate.

I suppose you can say you'd have guessed that outcome considering the metrics we have data for, but I sure wouldn't.

OffTheCuff said...

Yes, Anonymous, it is a conundrum. "I won't marry a slut/neither will I marry someone without sleeping with her" In other words, you have no intension of ever marrying.

That's not true. You can sleep with a woman who's not a slut. I lived with my wife first, and then married her. Happens all the time.

Don't fall for the "I have to be a virgin, otherwise men think I'm a slut" line of thinking. Most men don't really think that way.

Pierre-Luc M. said...

Graphs: Label and quantify your axes and we may have a winner.

Pierre-Luc M. said...

Graphs: Label and quantify your axes and we may have a winner.