Friday, February 24, 2006

Polygamy Revisited

Tyler Cowen admits he's a square and takes on the polygamy wing of economics. He asks, in my opinion, the right questions -- basically, does allowing polygamy make society better off? Economists frequently fall into a trap of noting how some group of individuals can be made better off by some alternative arrangement while forgetting to think about other implications.

The economic justification for polygamy is simple. One of the core assumptions of economics is that more choices make people better off. If people freely choose to engage in polygamy, then they must be better off then they were under monogamy -- otherwise they would have chosen to be monogamous. Thus, allowing them to choose polygamy improves their welfare.

But what if your choice to be polygamous makes society worse off? What if, as Cowen suggests, polygamous relationships encourage the production of more children at the expense of each child's quality and this produces long-run negative externalities in the form of lower growth. Should we, as Cowen argues, "encourage family structures that spur human capital formation"? Do we beleive, as he does, that "polygamy does not do the trick"?

As a helpful hint for completing your first paper assignment, let's outline the key assumptions of this argument. First, individuals choosing to engage in polygamous relationships will produce more children with less human capital. Second, that more kids with less human capital imposes a cost on future generations in the form of foregone growth. Third, that the individuals choosing polygamy fail to internalize (or care about or offset) these effects when making their choice. Finally, that the discounted loss in future well being offsets the total (current and future) gains from legalized polygamy.

If you believe this set of assumptions (or something similar), supporting restrictions on polygamy may make sense. Note, that before pledging your support to the anti-polygamy group, you should ask yourself one final question -- is there a different policy choice that achieves the same goal (increasing future growth) at a lower cost? (This, of course, assumes that lost human capital is the only reason you oppose polygamy. If you have other reasons, then you need to consider if their is a cheaper way to achieve all of your goals.)

UPDATE -- Alex Tabbarok disagrees with Tyler's argument.

A separate consideration, outside of this analysis, is whether people who are practicing polygamy have full information. Given that, even when it was legal, polygamy was principally practiced in a few religious groups implies that reasons may have been ideological rather than strictly rational. (That's not to say an ideological decision is always wrong.)

On a related note, a new Angrist et al. paper indicates that the quantity-quality relationship may be a function of biased OLS regressions.
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