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Dollars and Sex

An economist puts a price on sex and love

Marina Adshade

When researching behaviour, put your faith in 'revealed preferences' rather than polled ones: if you ask someone whether they would date outside their racial group, they usually feel compelled to say they have no racial preference. Instead you need to get data from dating sites to see what they actually choose.

Premarital sex closely linked to family income - girls in poorest homes 50% more likely to be sexually active than in richest homes. And attitudes to pregnancy also correlate - less than half poorest would be "very upset" if got pregnant, vs 2/3 of rich.

Marriage increasingly rich privilege: in 1960 college-educated and high school only-educated had similar rates of marriage (76% and 72%). Today figures are 64% and 48%.

For first time, large numbers of highly educated women. They also tend to be quite promiscuous, not because they are less moral, but because there are few compelling reasons not to have sex. They know how to avoid pregnancy and disease, and they have the bargaining power to insist that protection is used. And should they get pregnant, they have the means to support the child on their own, or terminate the pregnancy. Most importantly, they don't get the shame or persecution their grandmothers or mothers faced.

Social expt where moderately attractive man/woman approaches opposite sex and says "I've noticed you around campus," and then one of three propositions: "would you have dinner with me tonight?/would you come to my apartment tonight?/would you have sex with me tonight?" About 50% of males and 50% females agreed to dinner. 75% of the guys agreed to sex (with the other 25% expressing regret that unavailable that night). Zero women agreed to have sex with the stranger. Note the stats: 50% more men happy to have sex with stranger than would go to dinner with her.

Binge drinking, as you'd expect, strongly correlates with promiscuity and risky sex. And binge drinking correlates with tough drinking laws, such as high minimum age restrictions and minimum drink prices. Simple reason for this: kids preload before go into town.

Discussion as to what counts as 'prostitution'. All agree that paying for sex is P. If woman has sex with landlord instead of paying rent, that counts as P as well. But fewer agree that having sex in exchange for being taken to NY for the weekend counts as P. Final scenario - man buys girl drinks all night and she feels obliged to give him sex in return. Women all deny that that is P; guys undecided, and always ask one question first: how expensive were the drinks? The women didn't accept that buying the drinks auto entitled the guy to sex, but they did feel that the entitlement increased with the cost of the date.

Almost always "assortive mating" - we end up with people of similar income and physical beauty.

In online dating, everyone is above average (funnier, kinder, better looking and better in bed). Less than 1% rate themselves below average, and only 29% of men and 26% of women rate themselves "just average". And, despite assortive mating, people consistently tried to contact others more attractive, and ignored those of equal attractiveness. Which suggests that if someone expresses interest in you on a dating site, you are probably out of their league. (Statistically speaking).

Women care about looks too. Given choice between a 9 man (ie top ten %) in looks who earned $60,000 a year, and a 1 man (bottom 10%), the unattractive guy needs to be earning over $250,000 for the woman to prefer him.

Black women overwhelmingly prefer to marry black men, and Asian women tend to prefer white men to Asian men.

Every year of education decreases same-race preference by 1.2% Partly explained by fact that higher education often accompanied by greater mobility, both to college and subsequent career.

In 2004, 12.5% all blacks aged 25-29 in prison. Only 3.5% Hispanics and 1.7% of whites. You would expect educated black males to be more likely to be married, given that they must have more opportunities with so many of peers locked up. But in fact their relative scarcity gives them greater market power on the casual sex market and they don't need to get married.

Polygamous marriage drives up price men are willing to pay for sex (since fewer women available to marry). More women will then choose prostitution as alternative to marrying a low-resource man. Steven Levitt study on prostitution in Chicago found that when demand spikes over July Fourth weekend, women enter the market temporarily in response to the higher pay. same thing happens in China, where excess of men makes prostitution profitable enough that better choice than marriage.

Loneliness when you are alone is one thing, but loneliness within marriage is loneliness stripped of all hope.

(London Times)

If you have ever searched the internet for the phrase “why do people divorce” you know that it has recently become popular for pundits to blame access to online dating and social networking sites for a decline in marriage. Even the providers of these online services have waded in on this discussion: Dan Winchester, the founder of, said: “The future will see better relationships but more divorce,” crediting the efficiency of online dating for this rise in divorce rates.

What makes this claim interesting is that the emergence of online markets for love almost perfectly coincides with historically unprecedented declines in the national divorce rate.

According to the Office for National Statistics, the divorce rate has fallen from a high of 14 per 1,000 marriages in 2004 to 10.8 in 2011, the most recent year available. Divorce rates in the UK have not been this low since 1977. Given that divorce is most common between a couple’s fourth and eighth anniversaries, most of those who split when divorce rates peaked in 2003 and 2004 would have married just as the online dating markets were opening up and, presumably, met much earlier.

It appears that the cohort of new brides and bridegrooms that met, and married, after online dating became available are actually less likely to divorce than those who met before, not more likely as current commentators are suggesting. The problem with this theory is that it forgets that the search for love is happening in a market and that market theory predicts that the opening up of new, online, markets should allow higher-quality marriages that are more likely to stand the test of time.

To understand why this is the case, think about singles as buyers and sellers who meet in a market with the purpose of engaging in trade. In the absence of currency to smooth transactions, in the market for love a single person must search until they find a buyer who both wants the qualities that the single has to offer in a relationship and offers the qualities that the single desires in a romantic partner. These searches can be both long and costly, especially in markets with few buyers and sellers, which has generally been the case in traditional dating markets.

The way that we, as singles, resolve the problem of thin marriage markets — markets with few buyers and sellers — is by compromising on what we are looking for in a mate. We don’t wait for our Mr or Ms Perfect, because we might never find them; instead we settle for our Mr or Ms Good Enough. While such a compromise may be a good way to get on with the happy-ever-after part of our life sooner, it is not a good foundation for a happy marriage.

Before internet dating became available, many singles faced thin markets that encouraged them to settle for imperfect matches, and those imperfect matches frequently ended in divorce.

Starting in the late 1990s, and increasingly through the 2010s, access to the internet brought buyers and sellers together, virtually, all in one place, so the internet generated a whole variety of ways for us to meet new people.

According to data collected by the Oxford Internet Institute, among UK couples who met online after 1997, only 50% found each other through dedicated dating sites; the rest met through social networking sites (13%), gaming sites and special interest chat rooms (16%), and instant messaging and other online services (21%).

The internet has solved the thin market problem and those singles who traditionally had the thinnest marriage markets have benefited the most: singles searching within narrow religious or ethnic groupings, singles with disabilities, and those with very specific preferences for a mate, just to name a few.

It is not surprising, for example, that gay men and lesbians use the online resources to search for a mate more frequently than do heterosexual men and women, given the size of the market. According to the same study cited above, 60% of gay men in a cohabiting couple searched online dating sites for love before beginning their current relationships, compared with 29% of straight men, and 31% of lesbians in a cohabiting couple searched online dating sites for love, compared with 26% with straight women.

Today, the fact that more couples are meeting in larger marriage markets means fewer singles are forced to settle for less-than-perfect mates. They can be more optimistic about finding a partner who possesses most, if not all, the qualities they desire in a spouse.

Just for the record, when it comes to marriage quality, it doesn’t really matter where a couple finally meet; a couple who meet through the online comments on The Sunday Times (it does happen!) are not necessarily going to be happier than a couple who meet at a friend’s party. What matters is that as singles they were looking for love in a market that was large enough to have encouraged them to keep searching until they found someone who was perfect for them.

There is evidence, though, that access to the internet correlates with happier marriages. For example, researchers at Oxford working with those at the online dating site eHarmony have found that couples who met online shared more common interests (such as socialising, entertainment and music, going out, community and religious involvement) than did couples who met offline.

Researchers at Tilburg University in Holland found that the more frequently an individual uses the internet, the happier they are in their marriage; married individuals who have access to the internet keep fewer secrets from their partners, feel more attached to each other and have a greater passion for their relationship.

Todd Kendall, an economist, used data collected from 43,552 American couples and found that those in which the husband uses the internet daily are less likely to divorce than those in which the husband uses the internet less frequently.

Getting back to where we started, the argument for why online dating could cause divorce rates to increase is based on the idea that finding love in cyberspace is so easy and enjoyable that married people will be eager to return to the market, discarding their current partners in the process. I find this explanation interesting, given that I have yet to meet anyone who thinks the process of finding love in the modern world is anything but exhausting.

One of the problems with online dating is that happiness in marriage is more about the experiential qualities of a partner than it is about qualities that can be measured and easily identified on an online dating site (such as age, height, income and education). Personally, I will be happy with online markets when they allow me to search for qualities such as how good the person smells and how their smile makes me feel. We aren’t there yet, but changes in the online community, particularly around social networking, are getting us closer.

More books on Dating

More books on Marriage

More books on Divorce

More books on Sex

(The Independant)

Four years ago, Marina Adshade, an economics professor at the University of British Columbia in Vancouver, struck upon an ingenious idea to get her students more excited about learning economics: she would use familiar subjects such as sex and love to teach them.

In fact, Adshade argues that almost every option, every decision and every outcome in matters of sex and love is better understood by thinking within an economic framework; the supply and demand of our intimate needs, if you will. Adshade proves, through a number of global studies, that our decisions in matters of sexual relationships are made with a firm grasp of economics, whether we realise it or not. Now she has compiled all the research into a new book, Dirty Money: The Economics of Sex and Love.

Adshade acknowledges that the economic theories are not intended to describe the behaviour of everybody in society but, statistically, the behaviour of people on average. And none of the evidence in the book comes from public opinion polls; everything is based on choices individuals actually make, not the choices they say they would make when given options.

"When I look at the evidence data that we collect, often what I find is that a lot of our preconceptions about the decisions people make in terms of sex and love are not wholly accurate," says Adshade.

"People often behave in ways that we don't anticipate."

Dirty Money has no interest in discussing right or wrong behaviour; Adshade focuses solely on how people actually behave as opposed to how they should behave.

Hard times mean less teenage sex

We tend to have the perception that teenagers are more sexually active than they were in the past but, according to research, that's really not true. In fact, teen promiscuity rates have fallen and there is an economic story behind it. "Back in the 1980s, if you finished secondary school and you didn't go on to university you still could earn a pretty good living wage," says Adshade.

"Secondary-school leavers earned enough to support a family and have a home and so on. Over time that's really changed and it's become much, much harder for people who don't go on to further education to support themselves and to own their own home, for example."

Teenagers actually recognise this, and understand that there is a big cost to not continuing with their education, so when they're in high school they protect themselves from anything that might prevent them from doing so. There's a much bigger cost to teen pregnancy in 2013 than there was to teen pregnancy 20 or 30 years ago. Teens are responding to economic incentive and the very real change in the way that people earn their income, especially the reduced wages of people who don't have an education.

The internet and the marriage market

Divorce rates in the UK have been falling for almost 10 years, having peaked around 2003-2004. In fact, they have now fallen to where they were in 1977. One possible explanation is to do with the way that people marry each other and, specifically, how they meet.

Internet dating started around 1995-1997 before picking up steam. Some people started connecting on dedicated online dating sites and, by the new millennium, more and more people met on social networking sites, so much so that in the UK more new couples who meet on the internet form away from online dating sites than on them. Of couples who meet online, the vast majority are meeting on social networking sites, chatrooms, through commenting on blogs and the like.

"Before the internet, when we had a really small market, we couldn't afford to be very picky about who our partners were," Adshade says. "The internet opens up the market for dating and marriage, the pool becomes much bigger, which leads to people searching for longer and searching for somebody who is a little bit more perfect for them." Having a bigger market the theory goes, should lead to better marriages and those marriages are less likely to end in divorce.

Why there's more sex on campus

The number of women going to university has gradually increased so there are now 130 women for every 100 men. "Although you might think that fewer men means that women are having fewer relationships because there's a shortage of men, when we look at the evidence, the shortage of men on college campuses is actually increasing promiscuity," notes Adshade.

Because women are competing for scarce numbers of men, the men are getting to determine what kind of relationships they are having. "In the past if a man wanted a woman to sleep with him he would have to at least take her on a date or something like that," says Adshade. "Now that it's so much more competitive, they don't even need to do that, they just need to send a text message. It's an interesting story because the increase in female education is in part fuelling the hook-up culture."

The greater education levels of women is also affecting the marriage market and changing the way that women look for partners. Historically, educated women, especially with university degrees, almost always looked for partners who are at least as educated as themselves. But given that there's now a shortage of educated men, insists Adshade: "More and more women are opting for less educated men and marrying younger men and they structure their relationships very differently as a result.

"In those households, the women are often the higher income earners, meaning that men have to contribute a lot more to the household in terms of childcare and housework and so on so it has a really interesting effect."

Older women and the 'man shortage'

Because women live longer than men we tend to have a perception that women are disadvantaged in the dating market later in life. Not only because men die sooner but because they also have a tendency to search for younger women.

"We hear a lot of stories saying that if you're 60, for every single man there are about eight single women or if a man's wife dies, then women are lined up down the street with casseroles, but that's simply not the case," observes Adshade. "If you look at the data, none of this is borne out in the way people behave."

Early in life we assume that women are looking for a longer-term commitment and men are looking for short-term relationships, but later in life, women are actually looking for short-term relationships and it's the men who are looking for the longer-term commitment because they're hoping to find somebody who will take care of them when they reach old age.

"This really changes the dynamic in the market so it means that, for example, when older people search online, the women are actually very, very picky," notes Adshade. "In fact they're more picky than younger women; they're not sacrificing so that they can be in a relationship. They only want to be in one if they know that the person they're with is financially stable and healthy because they don't want to be left taking care of them.

"Whereas men actually become much less picky as they get older. We may have this perception that they're looking for women who are younger than themselves, but a lot of older men end up with women who are older than them."

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