A Rational Cost/Benefit Analysis of Marriage

by Chuck Ross on November 17, 2009

 This study conducted by Professor Paul Frijters of Queensland University in Australia calculates the costs and benefits of marriage. Frijters estimated the sum of money that would be the equivalent of certain life events for married men and women. Naturally, the headline leads one to believe that a man gains the most happiness from a marriage. Scouring through the numbers and analyzing the real-life picture of marriage shows a different outcome for men. While this type of study is highly specious, it is interesting to analyze.

When calculating the present value of something, one has to take into account probabilities and the effects of interest rates on the value of future events. The golden rule of finance is “a dollar in the future is worth less than a dollar today.”

A marriage buys $29,600 (17,700 British pounds) in happiness for a man and only $14,600 (8700 BP) for women. Marriage is a steal of a deal for the man right? Wrong. A newly married couple has about a 50% chance of divorce which entails higher “costs” for men than women. Perhaps due to the monetary cost or the emotional one, divorces cost $102,000 (61,100 BP) for men and a paltry $8,300 (5,000 BP) for women.

Multiplying the costs of divorce by the probability of it occurring gives us a true picture of what the whole rigmarole of marriage costs at the outset – when our whole future is subject to the winds of change and the gina tingles of your potential wife.

If we break out our abaci, we’ll see that the whole marriage package leads to a net present value of negative $21,400 ($102,000 times 0.5 plus $29,600) for men and a $10,450 gain for women.

Granted, men gain more happiness from having children, according to this study, but it is unclear what the effect is should divorce occur. The study doesn’t break down the numbers to indicate if the high cost for male divorce includes the likely loss in custody issues or child support payments. More importantly, the study doesn’t indicate whether the large benefit men gain from having children is dependent on an intact marriage. Men also suffer a $16,000 deficit when changing homes.

In all, if we’re to conduct a rational cost/benefit analysis of marriage, men absolutely lose out. From a financial standpoint, an investor should accept projects that have positive net present values. After all of the costs are accounted for and the future income discounted back, if we have a positive value, we should accept the project. Likewise with marriage decisions, if a man has a positive value, he should “invest” regardless of the huge deficiency he has compared to the woman. According to this analysis, if the marriage doesn’t produce children or the costs of divorce are higher or there is a change in domicile, the man should forgo marriage.

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