Marriage, Markets, and Money: A Coasian Theory of Household Formation

Abstract

This article integrates search‐based models of marriage and money. We think about households as organizations, the way Coase thinks about firms, as alternatives to markets that become more attractive when transactions costs increase. In the model, individuals consume market‐ and home‐produced goods, and home production is facilitated by marriage. Market frictions, including taxes, search, and bargaining problems, increase the marriage propensity. The inflation tax encourages marriage because being single is cash intensive. Microdata confirm singles use cash more than married people. We use macrodata over many countries to investigate how marriage responds to inflation, taxation, and other variables.

Three Essays on Identification and Estimation using Sample Combination in a Missing Data Context

“…It can be observed in Table 3.10 that singles use cash and close substitutes such as SVC and CTC relatively more than individuals living in non-single households. This result is in line with the findings of Burdett et al (2016) suggesting that being single is cash intensive, which the authors explain by the different types of expenditures made in different types of households: goods and services associated with monetary exchange -such as dining out -are demanded in greater quantities by single than by married people. Consistently, the coefficient estimates for couple households are positive in the case of CC and DC usage.…”