An Economic Analysis of Mahr

Abstract

This paper purports to analyze the effects of Mahr on marital behavior and some important intra-family decisions by appl-ying microeconomic tools. Theoretical an-alyses imply that an increase in Mahr increases the implicit price of marriage, and it would decrease demand for marriage and thereby increase demand for marriage substitutes. An increase in Mahr would increase the net expected benefit of fertility for the husband and would decline it for the wife. It creates divergent incentives for fertility in the family that might decrease it. Due to the contradictory incentives of wife and husband, the final effect of Mahr on the divorce is not theoretically predictable. However, it seems that if the wife is not inclined to exchange part or whole of her Mahr for divorce and custody rights (which are given to the husband by default), then domestic violence might increase in the divorce process.