Caste, cost and cause

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People marry within their castes because it is not costly to do so, say four US-based economists.

T.C.A. Srinivasa-Raghavan

The latest issue of The Economist shows that it has finally woken up to what I (and many others) have been pointing out for some years — that there is something seriously and fundamentally wrong with economics. But the writer of the article thinks that economics can be redeemed.

My own view, to which others will doubtless come around in the fullness of time, is the opposite, namely, that it is beyond redemption. I believe that both theoretical and empirical economics have shot their bolt.

They no longer have anything useful to do or tell us. As dead-ends go, the one economics has reached is hard to beat.

Theoretical economics had reached this point sometime in the 1970s and empiricism was a reaction to it.

But now empiricism has also become mindless and utterly pointless. Zero multiplied by zero is zero.

If we can learn anything from the fate of other disciplines that were once fashionable, the reaction to this will not be redemption. It will be a rejection of economics as a serious discipline.

The best measure is to use student enrolments as a proxy. The declining enrolments show what happened to political science in the 1960s, psychology (not to be confused with clinical psychiatry) in the 1970s and to sociology in the 1980s.

Economics escaped because, being a relatively new discipline, it was still possible for it to re-invent itself.

That room has now been exhausted. From here on, there is only one way left — down. This will be reflected in due course in the salaries of economists. I am willing to open a book on this.

Caste and marriage

Just look at what economists are doing these days. Two “highly respected” economists, Abhijit Banerjee and Esther Duflo, along with two others, Maitreesh Ghatak and Jeanne Lafortune, have written a paper called “Marry for What: Caste and Mate Selection in Modern India” (NBER Working Paper No. 14958). They say they got hold of a unique data set about people who placed matrimonial advertisements in one major newspaper in India.

Unique? I wonder if this is the same set of ads that the Dr K. N. Raj used to collect, albeit as an amusing diversion. If it isn’t, well, some research assistants must have managed to earn some money.

Anyway, this paper, say the authors “studies the role played by caste, education and other social and economic attributes in arranged marriages among middle-class Indians…

We estimate the preferences for caste, education, beauty, and other attributes. We then compute a set of stable matches, which we compare to the actual matches that we observe in the data. We find the stable matches to be quite similar to the actual matches, suggesting a relatively frictionless marriage market.”

Key finding

All this is fine. But now comes what the authors call their “key” finding. This is that “there is a very strong preference for within-caste marriage.” Then, seemingly aware that this is a banality, they add a bit of ‘economics’ to it.

“However, because both sides of the market share this preference and because the groups are fairly homogeneous in terms of the distribution of other attributes, in equilibrium, the cost of wanting to marry within-caste is low. This allows caste to remain a persistent feature of the Indian marriage market.”

As ignorant rubbish goes, this is hard to beat. Caste preferences are not about cost. They are about notions of purity. But how can you expect economists to pay attention to sociology?

But read the gibberish to see the direction in which economics is headed. “Our results indicate that while caste is highly valued in terms of preferences, it does not require a very high price in equilibrium. This is consistent with assuming that preferences are relatively horizontal and that the populations are close to being balanced.”

So, inferences-wise, where do we go from here? The authors come up with three conclusions. First that economic growth will not undermine caste. So, whoever said that it would? Second, caste-based marriages will not impede economic growth. Whoever said they would?

Last, they say: “If caste becomes less important, inequality might increase along other dimensions as we will see more assortative matching.

Given that the matching is already close to being assortative this is probably not an important concern.” Well, thank god. The authors also found that about 30 per cent marry outside their castes even though they gain very little from doing so.

“So why do they do it?” ask the authors. One reason is some of this 30 per cent don’t really care. But “a substantial fraction of the marriages that are not within caste are love marriages.”

And the main takeaway after all that? “An institution that economic forces are not able to destroy may be endangered by love.” As my grandmother would have said. “Aiyyo, Rama!”

(This article was published in the Business Line print edition dated July 22, 2009)
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