Wednesday, December 10, 2014  | 12:30pm-1:30pm | Room 237, HSBC Business School Building

Abstract

Prior field experimental work which randomly assigned incomes to male profiles on one of China’s largest online dating websites found that women’s preference for mate income is increasing on the women’s own incomes (“income attraction”). A question remains as to whether women prefer higher income men due to their need to be compensated for the loss of their own incomes from anticipated decrease in labor market participation after marriage or childbirth, as presumed by Becker’s theory of marriage, or if there is a “pure preference” for higher income component to their income attraction. We exploit the variation in the scarcity of women, as measured by gender ratios, across 15 major cities in China, to identify the reasons for their income attraction. We ruled out unobserved factors correlated with income as the basis of attraction by randomly assigning income levels to 450 artificial male profiles and recorded the incomes of around 1800 “visitors” to full profiles from search engine results of the online dating website. We found that women’s income attraction was increasing on their scarcity, even after we controlled for the gender wage gap, and the variance in the women’s own and men’s incomes. Furthermore, the effect was driven by high income women. Our finding that higher income women were expending more effort in searches for higher income men when women were scarcer suggests a pure income preference basis for China’s unique pattern of increasing marriage rates and decreasing relative female wages as the scarcity of women has increased.