That economists know about love and why is it explored

Economics and love are closely connected, but economists are not yet sure how: in attempts to figure out they develop a method of love, build mathematical models and think why emotions are rational, and feelings and minds are not opposite. What economists know about love are told by our friends from Econs.online . With their permission, we publish this material.

Economists can not say anything about love - such a widespread idea: they are dealing with inflation, exchange rates, savings, but if an expert opinion on social issues like family values ​​or relations is required, they usually turn to sociologists or psychologists. This is understandable: love does not fit into economic models with Homo Economicus - a rational economic agent who makes a choice in terms of maximizing its own benefit, and not under the influence of feelings and emotions. However, given that emotions can be crucial when making many decisions and even manage global markets , it is not at all rational to exclude them from analysis, Alessandro Badrino and Chardi's Chinch from the University of Pisa write .

Economists believe that emotions are beyond their interests, largely because the foundations of modern economic science were formed in the 1930-1950s, when behaviorism dominated psychology. It suggests that only the observed behavior can be the subject of scientific research, and unobsed psychological aspects and work of consciousness cannot be considered and described and therefore do not represent a scientific subject. The behavior itself consists of reactions to certain stimuli, positive and negative, and both types of stimuli increase the likelihood that behavior will be repeated.

Behaviorism had a significant impact on economic science. The assumptions about the complete rationality of economic agents are based on the fact that the economy is dealing with a repeated choice: decisions, for example, of consumption, are repeated, and soon agents learn to accept them completely rationally and efficiently. However, in many cases it does not work, and many decisions are made much less often than purchases in the supermarket.

Behaviorism has already disappeared from the mainstream of psychology, emotions are relevant again, and in psychology a cognitive approach dominates, they write to Bellerino and Chardi: first we pay attention to what is important for us, and then we evaluate this information. Imagine, they give an example that you alone walk at night through an unfamiliar area and suddenly hear screams and a clatter of legs approaching you: most likely, you will experience fear, and the processing of information about the surrounding circumstances will lead to the conclusion that you need to run or hide. It is difficult to say why this decision should be considered irrational. It can be erroneous, but only due to a lack of information about the situation.

Emotions are evaluative judgments based on a cognitive process associated with the beliefs and processing of information about events or people related to our well -being (in the “economic language” this is called “usefulness”), conclude by Baclerino and Chardi. Emotions do not make you forget about well -being at all - rather, they are a powerful tool to achieve it. Obviously, it is not necessary to contrast the rational person - in the end, in the novel “Reason and Feelings” by Jane Austin, a romantic sister concludes a more profitable marriage, and not reasonable, Italian economists compare.

Since economists usually think in terms of efficiency, we can say that love increases the efficiency of the couple, as it creates an environment in which they feel sufficiently protected in order to invest their material and emotional resources, conclude tributrino and chairs. Love, considered an emotion, is an absolutely suitable subject for economic research, since it is of great importance in making certain and absolutely rational decisions, they are convinced.

Economics without borders

Until the 1960s, economists almost did not go beyond the "traditional" economic topics. It all started with the American economist Gary Bekker , later the Nobel laureate, who was interested in an economic approach to social issues and has become the founder of many new areas of economic theory - the economy of discrimination, the crime economy, and the family economy. Along with Theodor Schults, also the Nobel laureate, he became the founder of the theory of human capital , laying its macroeconomic foundations (in particular, he considered the family’s expenses for education as an investment and assessed the effectiveness of education, proving its benefits for the economy, which then served as the basis for the development of state -owned sphere policy). Bekker is devoted to the economic analysis of the family - the social institution, before that practically ignored by economists: so, his “theory of time distribution” , having proved that a person distributes time not only between work and leisure, as it was believed, and that is another type of activity - householding, has made a real revolution in modeling household behavior.

The concept of altruism of generations, proposed by Becker together with Robert Barro , rethought the theory of birth rate: it was believed that the birth rate was determined by the need for parents to provide themselves support in old age. But Bekker and Barro are not the parents, but altruism, but their model, suggests that parents gain benefits from the success of their children and, when deciding on the size of the family, compare the costs of education with the future well -being of their descendants, and not their support in old age. This “intercoral love” (“dynastic utility”) determines many economic solutions that affect future generations, and can even counteract economic crises.

And the economic theory of Bekker's family turned the concept of the family as a unit of consumption, considering it as a unit of production of “joint utility” with the help of the source resources (time, skills, knowledge), after which the family came to the forefront of research in the social sciences. Thanks to Becker, the economists realized that they could focus on the study of issues such as the gender division of labor, the marriage market mechanisms, and family planning.

Fortunately and income

Bekker's family theory assumes that each household produces benefits endowed with certain usefulness for the family, and spends both material resources and time on this. For example, the household acquires electricity and meat is not for their direct consumption, but for the production of a family dinner in a comfortable atmosphere. The benefits themselves do not have market prices, but have “shadow prices” equal to the costs of their production (including time, efforts, skills, etc.). The number of goods produced, multiplied by their “shadow prices”, is the “imputed income” of the family. This approach explains, for example, that a partner, whose time on the labor market is expensive, will be less involved in the production of “non -market” home goods, and vice versa - a spouse whose market earnings are small will be more occupied with household chores or completely abandon the labor market, since the “production” of domestic goods brings a higher “large income” to their family.

Economically effective love

Just as competitive goods markets maximize the release of all firms taken, an effective marriage market strives to maximize benefits in all households, Becker reasoned , and each participant has its own “imputed price”, depending on its “quality”, determined by both material factors (income, assets) and intangible (mind, beauty, character). These “prices” serve as an incentive for marriage to maximize its usefulness.

As a rule, Bekker believed, marriages are consisting on the principle of the similarity of the “qualities” of partners: “high -quality” converge with “high -quality”, thereby receiving a bonus due to its high “productivity”, while for a “low -quality” price of “high -quality” it will be too high, but marriage with a partner of a similar “quality” can increase the total usefulness. However, marriages can also be concluded on the principle of distinguishing between qualities, if at the same time the total “release of goods” of such a family will be higher than each partner separately. Therefore, for example, the rich marry the beautiful, confirms the theory of empirical observations: "A positive correlation of the non -market features of women with men's incomes maximizes the total production of goods."

The formula of useful marriage is somewhat violated by love, since it represents a special case of influence on preferences, which is found in folklore in the form of a popular saying about an extremely irrational choice of a very inappropriate object of attachment.

But speaking in the language of the market - marriages in love are more productive, Bekker notes. A marriage associated with love is effective, even if one of the partners does not like the other, since the “selfish” in marriage receives from another resources that he transmits to maximize his usefulness; The marriage to the loving in this situation is also more profitable, since the benefits he receives (for example, physical or emotional contact) in the marriage can be “produced” with lower costs than out of marriage.

Using Becker’s approach to the marriage market, in the early 2000s, economists from the University of Research at Claramont Graduate University studied the influence of the genetics of the population (as the “biological basis” of human capital) on economic growth. The base model included many different variables, such as work, consumption, savings, education, including emotional benefits of marriage, but not love, researchers write, understanding the irrational component of the choice by love.

In the model, rational agents decide on marriage, based on the attractiveness and human capital of a partner (defined as a function of cognitive abilities and education), as well as potential benefits of marriage - an increase in income if a partner has a higher human capital, and pleasure from his attractiveness. When marriage, agents decide on the size of the family, choosing between personal consumption and children. These decisions determine the dynamics of the population and the volume of economy. The basic model reflects biological evolution - unattractive people with low human capital gradually disappear from the gene pool, beauty eventually strives for their limit, while human capital can continue to accumulate - this is precisely what the long -term growth of the economy is explained. In a negative version with a sharp increase in inequality, the population and release fall, since the inequality reduces the number of pairs suitable for each other; And they fall until people become less selective in choosing a partner.

However, if you add love to the model as an emotional component of choice, the growth rate of the economy throughout the life of each generation increases more than half in comparison with the base model. The “adding” love, unlike the basic version, leads to an increase in genetic diversity while maintaining, in contrast to the negative scenario, the basic criteria for choosing “smart and beautiful”. The authors call this “the effect of golden -haired”, that is, an ideal option that excludes extremes (in the English fairy tale - in the Russian interpretation this is the fairy tale “Masha and the bears” - getting into the house to bears, chose not too hard and not too soft bed, not too hot and not too cold porridge, etc.).

Over time, the gap in the volume of the economy between the basic version and the “with love” option becomes multiple - since in the basic version the reduction of genetic dispersion leads to a slowdown in economic growth, and in the “love” version, the economy continues to grow relatively quickly. Thus, the model suggests that love is an essential factor in economic and social development, the authors conclude.

"Methodology of love": monopoly, product, free -year -old problem

Economists from Australia and the USA Gigi Foster, Mark Pingle and Jinzin Yang developed a mathematical model of love itself, its emergence, development and dying. The model showed that stable love relationships arise as a result of balancing opposite forces: attraction to the object of love and efforts that lovers put into relationships. In the understanding of the authors, love is a quasi -consumer product that can bring satisfaction (usefulness). But marginal utility decreases over time, and if the inertia of love is not enough, it is declining. The presence of inertia in the formula helps to explain why some love relationships are long and stable, while others come to naught for no apparent reason: it is understood that there is a “threshold” of the level of love, above which it is self -supported, despite the inhibitory inertial force, but if love is lower than this “threshold”, then inertia leads to the termination of relations.

In a scientific sense, economists still know little about love, states Martin Zelder, an economist from the University of North Carolina, in the theoretical article “Fundamentals of the Love economy”. Economics and love are quite compatible, he is sure, although a certain methodological work is required to build such a connection. The fundamental issue that the economy of love should solve is what love is.

Love can be considered as an economic good - but it cannot be bought directly as a cup of coffee or a legal service: rather, this is the good of “home production” in the definition of Becker (see the insert above), the Zelder argues, that is, the unification of the time of two partners with other resources (for example, music, books). If this is targeted production, that is, a couple accumulates time and money to make as much love as possible, then love is one of many goals - the more resources are spent on it, the less remains for the rest, and the “reproduction” of love will bring less benefit. We can say that the optimal pair produces and consumes the optimal amount of love, as well as sleep, home dinners, repair, etc., that is, maximizes the usefulness where the subjective feeling of happiness serves as a measure of usefulness. But love can be both side, or related, a product of some joint processes - and then, on the contrary, the more a couple of sleep, domestic dinners and repair, the more they produce love.

Similarly, love can be considered both as a private and as a public good. As a private, that is, exclusively used good, love means that one of the participants can give “more” love to another, for example, spending time on what the object of love likes, but he does not like it himself. As a public good, that is, freely consumed by all parties, love suggests that each of the participants in a love relationship possesses it. The differences between private and social good in relation to love are important for understanding why difficulties arise in love relationships, Belarusian thinks. For example, due to the fact that many “products” related to relations (children, family financial management, the arrangement of the house) are “the problem of the free -fiber”, when the consumer of public good seeks to evade its payment: this is how the tendency arises to devote less efforts to “production” of goods.

In addition, each of the participants of the couple can be considered as a monopolist in the “production” of love, and each of them can consider himself a unique manufacturer. As a result, both can strive to ensure that the other “pay” for “love” more, which can result in conflict and reduce “production volumes”.

In the event of a conflict, each of the partners can evaluate their benefits and costs from parting or maintaining relationships. Given that love can be perceived as a private good, a partner who wants to maintain a marriage can assume that if he changes his behavior (“transmit” part of love to the partner), then the marriage will continue. However, since love is also a public good, it cannot be “transmitted”. As a result, the second partner may come to the conclusion that it is more profitable for him to part, although in fact both in this case will lose.