Tag Archives: romance

ECON 2-14: The Economics of Love


I’ve held the view that there is a false dichotomy between love and money for some time. High-earning women are more likely to be attracted to high-earning men. Women will use terms like “hard-working” and “ambitious” to describe the kind of men they want to marry as opposed to “rich.” However, there is a correlation between men who have those descriptors and socioeconomic status that can’t be ignored.

Economics is concerned with the management of scarce resources. Men and women who are attractive (either physically, financially, or emotionally) are scarce resources (normally we would use the term “special”). People seek stability, companionship, compatibility of interest, etc. They invest in people and hope to find a payoff in the form of having a companion for the rest of their life. They enter into a contract called a marriage. They combine resources such as housing, bank accounts, and personal possessions. Divorces deal with how those resources are divvied up.

In Western culture, the concept of affectionate individualism is built on the premise of investing in love and compatibility to achieve security. If love fades, the security is often at risk, and women have also achieved more financial independence, providing less desire to enter an institution built on security. In Eastern culture, especially India, couples enter arranged marriages that follow the old way of combining resources. In a way, Easterners are more willing to acknowledge that a marriage is an economic institution. There is no pretense of passionate love. Arranged marriages are less likely to end in divorce because they invest in security and stability first, and love may grow as a result.