Thursday, August 6, 2009

the economics of marriage in iraq

From AP - Muhanad Talib, a Sunni Muslim, married his Shiite bride because she was a "suitable woman" for him. It also didn't hurt that their vows made them eligible for a $2,000 payout from the government.

Talib and his wife are among more than 1,700 newlywed couples who have accepted cash from a government program that encourages Sunnis and Shiites to tie the knot. The government has held 15 mass weddings for inter-sect couples from all over Iraq, with the most recent taking place last month at a club in western Baghdad once used by Saddam Hussein's army. » Full Story on Yahoo! News

"It's encouraging that according to the AP story such marriages are on the rise and the money seems to be treated more like a bonus than a compensating differential for risk" (Alex Tabarrok).

Another way to look at this cash payout is that it is a sort of Pigouvian subsidy (a.k.a., a negative Pigouvian tax) needed to overcome the reduced number of mixed marriages caused by the inefficient lack of government protection.

Be blessed!
RB

BONUS: Oxymoron of the Day: A sentimental economist.

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