Bachelor of Arts
Family, Economics, Marital
Economics has long been the study of maximizing production, minimizing cost, and analyzing distributions, but it was not until recently that the field of economics added the social institution of the family and subjective well being to its list. What is being expounded upon within this discussion is how marital happiness affects family economics. The question begins with how marriage affects the basic micro model of economics: utility, and in turn how marital happiness affects economic decisions made by the family, such as the amount of leisure and goods to consume.
Economic issues already analyzed within the family include joint and independent utility functions, the joint production function, distribution of economic resources, exiting constraints and more. The addition to the economic community that this discussion will be making hinges on a closer look at marriages shared goods; a good that can only be consumed within marriage, either produced by one spouse and consumed by the other or shared by both. From the shared good, we can analyze if happiness within marriage changes choices between shared goods, leisure, and private consumption, which in turn affects the personal or joint utility function when married.
The purpose of studying happiness within marriage for an economist when looking at it from the bigger picture is that it adds insights into the complex economic institution that would not otherwise be observable. The insights include how the complicated interplay of the resources allocated to shared goods and the leisure to consume them, is exchanged between private consumption. So, marital happiness, as it affects utility produced within marriage, can influence a variety of decisions. These broad definitions of goods once analyzed generically can define more specific issues such as economies of scale, income transfers, labor force participation decisions, human capital investments, and large ticket items such as a house or arguably children. In effect a happy marriage is not just interesting to sociologists and those who are married but gives insights into economic issues as well.
The layout of this paper will be as follows. In the second section there will be a literature review to highlight important points from which to construct the model and add to the discussion. In the third section the model will be developed and used to express how marital happiness changes family economics. In section four I will look at the data and its econometric results to support the model and then conclude. Appendix B will outline the idea of happiness as an endogenous decision.
Engelhardt, Bryan Eldon, "Marital Happiness and Family Economics" (2002). Honors Papers. 501.