Marriage Markets and the Rise of Dowry in India

Abstract

Dowry payments are common in many marriage markets. This paper uses data on over 74,000 marriages in India over the last century to explain why the institution of dowry emerges and how it evolves over time. We find that the proportion of Indian marriages including dowry payments doubled between 1930 and 1975, and the average real value of payments tripled. We empirically test whether four prominent theories of dowry can explain this rise, and find support for only one: dowry emerges due to increased differentiation in groom quality as a result of modernization. We then show that the average real value of dowry payments declines after 1975 and that this can be rationalized by a search model of marriage markets.