Economic Rockstar

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017: Marina Adshade on Understanding Economics the Sexy and ‘Hard’ Way

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017: Marina Adshade on Understanding Economics the Sexy and ‘Hard’ Way

Marina AdshadeDr. Marina Adshade, author of Dollars and Sex, engages in original economic research in the area of women in the economy. She has a Ph.D. from Queen’s University in Ontario Canada and currently teaches economics at the Vancouver School of Economics at the University of British Columbia.

In 2008, Marina developed a unique specialization in the economics of sex and love  and launched an undergraduate course titled ‘Economics of Sex and Love’, which invited her students to approach questions of sex and love through an economist’s lens. The class was an immediate hit with students and, by the time the first term started, had generated international media attention.

This culminated in the publication of her first book in 2013, ‘Dollars and Sex: How Economics Influences Sex and Love’. Marina converts economic theory into a sexy science by applying the principles of supply and demand and other market forces to matters of love, courtship, sex, intimacy, and marriage. 

Marina is a regular contributor to Canada’s national newspaper The Globe and Mail and the Canadian Business Magazine. She has written for several other publications including The Wall Street Journal, the Sunday Times and the Daily Mail in the UK, and Psychology Today. She is a sought after public speaker as well as a radio and television commentator on issues relevant to all women.

Economics Themes:

In this interview, Marina mentions and discusses: The New Household Economics, supply and demand, GDP, standard of living, bargaining power, the uncanny valley, unemployment, game theory, barter and the Big Mac Index.

Economists and Economic Schools:

In this interview, Marina mentions: Gary Becker, Shoshana Grossbard, Betsey Stevenson, Justin Wolfers, Thomas Malthus, Nathan Nunn and Jeremy Greenwood.

Influencers:

Jeremy Greenwood – Engines of Liberation, Gary Becker, Betsey Stevenson and all economists who have been brave enough to take on these topics.

When Gary Becker started on the New Household economics, he was criticised.

It takes a lot of courage to talk about new ideas and to bring new ideas into the economics fold – Marina Adshade.

One has to work very hard to maintain your creativity, to work hard to maintain a willingness to assume risks in the work that you do -Marina Adshade

Advice:

Make sure you know your value on the market – Marina Adshade

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Mantra:

The idea that you can take a risk and be successful and the willingness to think creatively. Apply creative thought to the work that you do can be incredibly valuable – Marina Adshade

Personal Habits:

I spend as little time as possible within my office sitting behind my desk. I like to be out in the world. If I have something that I have to write or a talk that I have to give, a lot of the thoughts that inspire that I get from being outside walking around.

In this episode, you will learn:

  • why we should use sex and love in economics.
  • why Dr. Adshade decided to use the topic of sex in teaching economics.
  • why international media attention from Korea and Russia brought a spotlight to Marina’s Module.
  • why Malthus called economics a dismal science.
  • how sci-fi novels are better at predicting new technologies more so than social change.
  • about the future of sex with androids.
  • how the male contraceptive can increase the bargaining of power of men over women.
  • how economic growth results in liberal attitudes.
  • if there is a causal relationship between economic growth and gay marriage.
  • who makes a better saver: men or women?

  • how Orgasms can be used to explain Game Theory.

  • how the market for sex and love is like a barter economy.

  • the similarities between Economics and Biology.

  • if you met somebody that had a variety of qualities that you valued but didn’t love, would you still marry that person?

  • about the Big Mac Index and the Blow Job Index.

Dollars and Sex ‘A collection of theories and evidence that would give anyone, frankly, a hard-on for economics.’

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Why Using Sex to Teach Economics Improves Student Engagement and Understanding

So much of what we do is about the fundamental unit of the household and so much of that comes form decisions that we make about sex and relationships. The reason why Marina decided on this approach to teaching economics was to simply engage with students. The material could be delivered in such a way that students could apply it to their own lives and internalise the theories that educators want them to understand.

How Sex Can Impact Our Social and Economic Environment and Vice Versa

Thomas Malthus called economics the ‘Dismal Science’ because he felt that economic theory predicts that whenever you have increases in technology, people would just increase the number of children they have in such a way that there would never be any gains in the standard of living. So, we were destined to be over-populated, over-crowded and poor.

The story of Malthus is based on our sexuality. Women couldn’t keep their knickers on as soon as national GDP went up a little bit.

I’m an Economic Historian. I spend most of my mornings thinking about the plough, the hoe and female sexual desire. We have 200 years of fertility changes. We have a hundred years of changes in sexual values. I think so much of this is rooted in our economics system. – Dr. Marina Adshade.

A small technological advance like contraceptives can have big social changes and can lead to the situation where we (US and Canada) are now. In Canada 35% of wives out-earn their husbands and that’s a remarkable change from where we were 30 or 40 years ago.

New technologies (on-line dating is now celebrating its 20-year anniversary) are arriving all the time and they are changing the way that we structure our relationships, the way that we bargain with our spouses and the way that we negotiate our lives within our relationships.

The future of sex with robots could be a reality by 2020. This will most definitely present some genuine challenges for us as a society when that becomes possible. The hypothesis of the ‘Uncanny Valley’ could present some problems for human-robot interaction, due to the possible revulsion or level of discomfort that a human has toward a robot. This problem could only be resolved if the robot improves its natural likeness and appearance as a human. Sex with robots has the potential to structure our relationships. It will have serious implications with our ethical challenges.

There are more imminent changes to our social economy. The introduction of male contraceptives into the market are only a matter of years away now, with human clinical trials taking place. This could potentially reduce the bargaining power of women regarding fertility to increasing the bargaining power of men. Handing the control of fertility to men has the potential to shift those dynamics.

Prostitution and other explicit markets have been transformed by technologies, where sex workers can advertise their services online. This movement expanded beyond the original market and has almost become normalised to the extent that other services are being provided online such as the Sugar Daddy – Sugar Baby concept.

The website SeekingArrangement.com reports year-on-year increases of female university student sign-ups to the site seeking a sugar daddy. Such increases are possibly the result of the mounting student debt faced by graduates and an arrangement with a sugar daddy could be a way of reducing this debt burden. Low wages and unemployment are also other factors that increases the willingness of students to enter such an arrangement. However, supply alone does not create a market, and the demand-side may not be as high. Therefore, the claim that the average amount in cash and gifts that a female sugar baby receives from her sugar daddy may not be as high as the $6,200 level.

The market for sex and love is like a barter economy. There is no currency that prices the supply or demand for sex. Perhaps there is an intangible currency in terms of the millions of stimuli that each person emits. The qualities that are revealed in this economy get picked on by other people.

Economic Growth Can Cause Social Attitudes Toward Sex to Change

Economic growth can change peoples attitudes, transitioning a country’s social norms from a conservative to a more liberal and open outlook. Many developed countries are debating about the right to gay marriage. Currently, Ireland will hold a referendum in May 2015 about right to gay marriage.

Marriage is an economic institution and we’d like to think that they create incentives for behaviour and they structure the way that our markets operate. But the institutions themselves is endogenous. Society chooses institutions that is optimal for them at any point in time.

The traditional marriage between a man and woman has historically been the optimal way of structuring a marriage, especially since men had the comparative advantage in work outside of the home. Men have the comparative advantage in wage labor and women has the comparative advantage in household production, particularly since the Industrial Revolution which caused a strict division between working and home. So, it made sense to structure marriage that way because of the gains from trade – men and women were so different.

This is no longer the case as the change in the nature of the market has eroded the man’s comparative advantage, particularly since it has become more skill-based and less physical. When men and women become similar with each other, then the nature of marriage changes. We no longer experience the gains from trade with marriage.

If marriage is no longer based on the gains from trade, then why limit marriage to men and women. Why not women with women and men with men. Marriage is more so based on love and companionship today and does not have the elements of the need for productivity.

Justin Wolfers and Bestey Stevenson talked about consumption compatibilities was the driving force of marriage in the modern period. It no longer makes sense to talk about the structure of marriage around the idea of production.

Economics and Biology: The Link

When we think of love as a biological response it is much easier to think of it in economic terms – the idea that we choose who we love. The heightened excitement that you get when you meet somebody that you’re attracted to is so similar to reactions to other experiences that people sometimes confuse them.

The height and adrenaline experienced by a person on a roller-coaster, can be the same heightened excitement that a person feels when attracted to someone. Perhaps the best first date could be the amusement park.

Blow Job Index

Instead of the Big Mac Index, The Economist could look at the Blow Job Index. They could look at variations in the prices of blow jobs around the world. There is an enormous amount of variation in the price of this service, which is largely a uniform service.

It is tied to opportunities for women and also for development. A blow job in Vancouver is possibly more expensive than a blow job in Bangkok. The problem is that it is incredibly difficult to get this data. There are web services that post prices but we’re not there yet.

A Big Mac is a standard product, irrespective of the country in which you buy it. In other words, a Big Mac in Canada is the same as a Big Mac in Ireland and beyond. However, prices will differ. A blow job, however, may not be the same in different countries due to the length of a penis. Should a blow job be more expensive in a country where the penis size is larger? If a Big Mac was twice as big in one country compared to another, then should you be expected to pay more?

Should the price of a blow job be correlated with the price of a penis? The Penis Size Worldwide Map, available on TargetMap.com

Recommended Books:

Favourite Internet Resource:

PEW Research Centre: Pew Research Center is a nonpartisan fact tank that informs the public about the issues, attitudes and trends shaping America and the world. It conducts public opinion polling, demographic research, media content analysis and other empirical social science research.

Where To Find Marina Adshade:

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014: Shoshana Grossbard on Why Dry Cleaners Charge Women More, on the Economics of Love & Marriage and on Polygamy

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014: Shoshana Grossbard on Why Dry Cleaners Charge Women More, on the Economics of Love & Marriage and on Polygamy

Shoshana GrossbardShoshana Grossbard is Professor of Economics at San Diego State University and founding editor of the Review of Economics of the Household.  Shoshana has been a fellow and visiting lecturer  at numerous universities including Stanford, Columbia University, the University of Zaragoza, Spain, Tel Aviv and Bar Ilan University, as well as in Munich and Bonn, Germany.

Shoshana obtained her Phd from the University of Chicago where she developed an interest in the New Home Economics from its founders, the late Nobel Laureate Gary Becker and the late Jacob Mincer. The main focus of Shoshana’s research is household economics, family economics and the economics of marriage and, as a student, developed her first non-unitary model of household decision-making. Shoshana is actively promoting the establishment of household economics as a separate specialty in economics. She is one of the first social scientists to have analyzed consequences of gender imbalance in the sex ratio for intra-household distribution, labor supply, fertility and cohabitation. The economics and social impact of polygamy is also a research interest.

Shoshana has published 5 books and more than 50 articles on the determinants of marriage, consumption and labor supply and on the law and economics of household decisions. She is fluent in English, French, Hebrew, Spanish, and Dutch and has presented her work at many universities in more than 13 countries.

Economic Themes:

In this interview, Shoshana mentions and discusses: household economics, family economics, economics of the household, household decision-making, sex-ratios, the economic and social impact of polygamy, determinants of marriage, opportunity cost, consumption and labor supply, immigration, population, marriage, price discrimination, government intervention and elasticity.

Economists and Economic Schools:

In this interview, Shoshana mentions: New Home Economics, Gary Becker, Jacob Mincer, Adam Smith, Arleen Leibowitz, Linda Edwards, Andrea Beller, Elizabeth Landes, Catalina Amuedo-Dorantes and Sankar Mukhopadhyay.

Shoshana’s Defining Moment/Affirmations/Mantra:

Shoshana is defined by the feminist movement of the 1960s/1970s in her early student days and her mother’s dislike of being a housewife.

I’ve remained a feminist for the rest of my life. It was always very clear to me that I was going to have a career in addition to having a family.

Personal Habits:

Hard work. I work very long hours, I work very hard and I’m very motivated to be successful. There’s no other way.

If you don’t work hard, things don’t just fall on your lap – Shoshana Grossbard

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Advice:

It’s very important to have a critical eye. Whatever you read you have to realise that most research, including research by economists is biased by the point of view of the writer and they have an axe to grind typically. You have to try to figure out what’s the axe they’re grinding before you read it.

In this episode, you will learn:

  • about Shoshana being a 1970s hippie and her demonstrations against King Constantine of Greece.
  • about the differences in female educational participation between the 1960s and present day.
  • about the sexist advertisements that existed which placed the wife in the household.
  • about the origins of the New Home Economics.
  • about what the theory of household means.
  • how Shoshana transitioned herself from an interest in the economics of education to the economics of polygamy while a student of Gary Becker.
  • how Shoshana’s approach to the study of polygamy differed with Gary Becker’s.
  • what quasi-wages are for the stay-at-home mum or dad.
  • if there is an opportunity cost to marriage.
  • the implication on labor force participation as a result of marriage.
  • about WiHo or Work-in-Household.
  • about the importance of the sex-ratio in determining labor force participation.
  • how Shoshana calculates the sex-ratio.
  • how women’s participation in the labor force can be a direct result of fluctuations in the sex-ratio.
  • how a high sex-ratio (more men than women) can increase the bargaining power of men.
  • how a low sex-ratio (more women than men) can increase the bargaining power of women.
  • if Hilary Clinton‘s year of birth allowed her to be the successful and educated person she is today due to the low sex ratio in the US between 1946 and 1950.
  • about the marriage-squeeze hypothesis (in which there is a shortage of men or women for marriage).
  • about the detail of Ireland’s population pyramid, which indicates a male marriage squeeze for those aged 4 to 10 (more males due to births) and a female marriage squeeze for those aged 20 to 29 (more females due to male emigration).
  • about the relevance of the sex-ratio of immigrants and how the freedom of labor can solve the problem of a  marriage squeeze.
  • if the availability of polygamy translates into a higher bargaining power for women.
  • if polygamy solves a marriage market disequilibrium.
  • about the polygamy ruling in Canada.
  • how polygamy can be harmful for young men and why they are known as the lost boys.
  • about the Fundamentalist Latter Day Saints in British Columbia.
  • if the government should intervene in markets where gender price discrimination occurs.
  • who pays more for dry-cleaning services – males or females – based on their elasticity of demand.
  • if we should trust our spouse given the ideology behind economics that all market participants are self-interested and seek to gain wealth without any consideration of others.
  • if spousal love diminishes once you have children and that the love you have toward your child compensates for the lack of love from your spouse.

Origins of New Household Economics:

When Gary Becker and Jacob Mincer started New Home Economics, it was mostly their initiative but it was the students at the University of Columbia at that time who participated in the labor workshops that were very instrumental in promoting and developing it.

There were a high proportion of women who attended the workshop including Arleen Leibowitz and Linda Edwards and, later on, Andrea Beller and Elizabeth Landes.

It is wrong to view New Home Economics as ideologically motivated to maintain old-fashioned gender roles.

One of the major ideas of the New Home Economics is to consider households like firms where there is household production and to analyse them with the same tools economists analyse business firms.

So basically, households are non-profit firms but there are many small non-profit firms in the economy that are considered part of the economy that are counted in GNP. But the most prevalent non-profit firm, the household, is not counted in the GNP.

Jacob Mincer and Gary Becker were not concerned about what was counted in GNP but they were more micro-economists. So they wanted to use all the tool available from price theory and apply them to the analysis of what households do:

  • How do they divide the housework?
  • Do women participate in the labor force?
  • The trade-off between household production and participation in the labor force.

The Origins of Shoshana’s Work:

Shoshana‘s approach to the study of polygamy took account of the point of view of women whereas Gary Becker considered variables such as how men’s incomes determined the number of wives he would have.

Shoshana challenged Gary stating that it’s not just about men’s income but it’s also a matter of women’s education, the age of the women, the fertility of the women and the resources that they have because they can bargain with the men about what they’re willing to do.

Shoshana continued to work on economic development issues because polygamy is practiced mostly in less-developed countries where she examined data in Nigeria and then the study of consensual marriages in Guatemala.

Jacob Mincer advised Shoshana, when she was seeking a job, to do more mainstream economics rather than the exotic research mentioned above which may not be of interest to economists in general. That is when she switched to the study of labor force participation and developed a theory of allocation of time in markets for labor and marriage.

There is a major difference between the model developed by Grossbard and that developed by Becker and Mincer. When Becker and Mincer talk of household production, they refer to households as a unit or as an entity making decisions. However, in Grossbard’s model it is the individuals making decisions.

Household Decision-Making and Quasi-Wages

The fundamental question of New Household Economics: Is there an opportunity cost to marriage and what is the implication on labor force participation as a result of marriage?

Individuals, from an early age, have a concept and vision of how they want to live their lives.

Work in Household (WiHo) represents the willingness to work in a household to, say, raise children.

On Gender Price Discrimination:

“We should all be conscious that sometimes there is exploitation of the consumer and if you don’t like the subliminal advertising that companies use to make you buy perfume or aftershave well then just don’t buy it.”

I’m not a fan of regulation – Shoshana Grossbard

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Dry cleaners charge more for women’s blouses than for men’s shirts, despite them being the same product, with perhaps the main difference being that the buttons on a blouse are typically located on one side of a blouse to that of a man’s shirt.

Dry cleaners are aware that the price elasticity of demand for a woman needing dry cleaning is less than that of a man, meaning that there is more of a need for women to use the dry cleaning services and would, hence pay more as no-one else would do it for them.

On the other hand, the elasticity of demand is more for men, meaning that dry cleaners may charge less for the same service so as to encourage men to dry clean.

Shoshana states that the reason for this gender price differential by dry cleaners is that the majority of men would not go to a dry cleaners as they have a wife, girlfriend or mother who would take on the task of cleaning their clothes. The WiHo or Work in Household is higher for these women as they have, in the majority of cases, taken on the responsibility of running the household chores.

The women who arrive at a dry cleaners are those who have a low WiHo perhaps due to a working career or an unwillingness to take on the responsibility of such chores or even due to the lack of people willing to do the work, such as a spouse.

How the Activities of a Home Differs to the Activities of a Market

Adam Smith stated: “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner but from the regard of their own interest”.

If we view all participants in a household as economic agents who have a certain degree of self-interest, should we trust our spouse?

The statement by Adam Smith is about the functioning of the market and how the competition among the bakers and the other professionals brings down the prices and eventually the consumer benefits.

The problem with household production, which is a non-profit firm, is that most of what is produced at home is not going to be sold in the market, principally the children, the beauty of the  home, the harmony in the home. These are products that are being consumed by the producers themselves or by the people who pay for the WiHo. In this case, the market system doesn’t work.

The benevolence of the spouse is a very important element. Adam Smith also had a Theory of Moral Sentiments and in the framework of the household, altruism matters. So, benevolence and altruism matters.

Favorite Books:

Favorite Internet Resource:

Where To Find Shoshana Grossbard:

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