Assortative Mating with Household Public Goods

Abstract

This paper analyzes marriage market equilibria when the gains from marriage result from joint consumption of household public goods. Assuming a class of utility functions which guarantee transferable utility within marriage, the paper proves that marriage markets will be characterized by positive assortative mating on income. A tendency for positive assortative mating on wages is also demonstrated, contrasting with Becker's predictions for marriages based on gains from specialization. The implications of the results for empirical analysis of household composition decisions are explored. an econometric technique is developed to deal with a wide class of problems in which the behavior of two agents depends on the dispersion in some characteristic.