WORKING P A P E R. Learning your Child s Price. Evidence from Data on Projected Dowry in Rural India A. V. CHARI AND ANNEMIE MAERTENS WR-899
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1 WORKING P A P E R Learning your Child s Price Evidence from Data on Projected Dowry in Rural India A. V. CHARI AND ANNEMIE MAERTENS WR-899 November 2011 This product is part of the RAND Labor and Population working paper series. RAND working papers are intended to share researchers latest findings and to solicit informal peer review. They have been approved for circulation by RAND Labor and Population but have not been formally edited or peer reviewed. Unless otherwise indicated, working papers can be quoted and cited without permission of the author, provided the source is clearly referred to as a working paper. RAND s publications do not necessarily reflect the opinions of its research clients and sponsors. is a registered trademark. This paper series made possible by the NIA funded RAND Center for the Study of Aging (P30AG012815) and the NICHD funded RAND Population Research Center (R24HD050906).
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20 Table1:Selecteddescriptivestatistics Numberofhouseholdsinvillage 1,720 Numberofhouseholdsinsample 339 Numberofmarriedchildren Numberofunmarriedchildren Averageageofmarriedchildren 21 Averageageofunmarriedchildren 11 Averagenumberofhouseholdmembers 5.55 AverageKharif income(rs) 2 51,176 Averageeducationlevelofrespondent(inyears) Averagedowrywillingtoaccept(boys)(Rs) 4 70,671 Averagedowrywillingtopay(girls)(Rs) 4 79,130 Averagedowrywillingtoaccept(boys)(Rs) 4 50,000 Averagedowrywillingtopay(girls)(Rs) 4 50,000 Notes: 1 A child is defined as an individual up to the age of 25. Note that the adults also include the daughtersinlaw under 25 who did not received their education in the household; 2 The Kharif season is the rainy season; 3 respondent is the main decisionmaker with regard to the education of the children under 25 year in the household; 4 Excludes children with zero dowry and the children for whom the parent could not answer the dowry question.the information of one child in Dokur is missing from the sample becausetheenumeratorsbyaccidentskippedhis/herquestionnaire.
21 Figure1:Thekerneldensityofprojecteddowryforboysandgirls Note:Excludeschildrenwithzerodowryandthechildrenforwhomtheparentcouldnotanswerthedowry question Figure2:Thekerneldensitiesofprojecteddowriesforgirlsaswellasthekerneldensityofactual dowriesfromtheretrospectivedata Note:Excludeschildrenwithzerodowryandthechildrenforwhomtheparentcouldnotanswerthedowry question
22 Figure 3: The kernel density of the logarithm of projected dowry for each of the three indicated age categories. The figure on the left panel refers to the results for boys and the panel on the right containstheresultsforgirls Note:Excludeschildrenwithzerodowryandthechildrenforwhomtheparentcouldnotanswerthedowry question
23 Table2:Correlatesofln(WTP)andln(WTA) Girls Boys Expectedreturnstohighereducation ** 0.1 (inthousandsofrs) (0.12) (0.12) (0.09) (0.09) Expectedreturnstolowereducation 0.70** 0.59** (inthousandsofrs) (0.34) (0.34) (0.37) (0.38) Logarithmofhouseholdincome(Rs) 0.24*** 0.23*** (0.08) (0.09) (0.06) (0.07) Logarithmofhouseholdwealth(Rs) 0.11* *** 0.15*** (0.06) (0.06) (0.04) (0.04) Educationlevelofdecisionmaker(inyears) 0.03*** 0.02** 0.04*** 0.03*** (0.01) (0.01) (0.01) (0.01) Numberofunmarriedboys (0.08) (0.09) (0.05) (0.04) Numberofunmarriedgirls (0.06) (0.06) (0.04) (0.04) Numberofadults (0.04) (0.04) (0.03) (0.02) Withingenderchildorder * (0.09) (0.09) (0.07) (0.07) Overallchildorder 0.10** 0.11** 0.12** 0.12** (0.06) (0.06) (0.05) (0.05) Minimumeducationdesired (inyears) (0.04) (0.03) Maximumeducationdesired (inyears) (0.03) (0.02) Constant 6.46*** 6.07*** 7.27*** 6.97*** (0.65) (0.63) (0.60) (0.60) Observations Rsquared Notes: *** p<0.01, ** p<0.05, * p<0.1; Standard errors have been clustered at household level. The dependent variable in columns 1 and 2 is the log of the maximum dowry that the girl's family is willing to pay. The dependent variable in columns 3 and 4 is the log of the minimum dowry that the boy's family is willing to accept. All regressions include caste and village dummies (coefficients not reported). Adults include the married boys and girls in the household. Household wealth includes durables, land, animals, stock, equipment, savings and netlendings. Expected returns to higher education computed as the average return to higher education. Expected return to lower education computed as the average return to highschool and below. Results are robust to different specificationsof(i)wealth,(ii)expectedreturns,and(iii)familycomposition.
24 Figure4:Thefractionofunmarriedchildrencurrentlyattendingschoolateachage Figure 5: The distribution of expected returns to higher and lower education change for each of the indicated age categories (for boys and girls separately). The upper two figures refer to returns to higher education and the lower two figuresrefertoreturnstolowereducation
25 Figure6:Dowryvarianceasafunctionofageforvariousparametervaluesofthepriceof qualityandthelearningparameter,c.
26 Figure 7: The agewise variance of actual, predicted and residual dowry, where the predicted and residual values are obtained from a regression of projected dowries on household variables. The top panel contains the results of the exercise for boys and the bottom panel contains the results of theexerciseforgirls
27 Figure 8: The kernel density of residual dowry for each of the three indicated age categories. The residual dowry was obtained from a regression of the logarithm of projected dowry on a set of household variables. The figure on the left panel refers to the results for boys and the panel on the rightcontainstheresultsforgirls
28 Figure9:Thekerneldensityofresidualdowryforeachofthefourindicatedagecategories.The residualdowrywasobtainedfromaregressionofthelogarithmofprojecteddowryonasetof householdvariables.thefigureontheleftpanelreferstotheresultsforboysandthepanelonthe rightcontainstheresultsforgirls
29 Table3:Estimatesfromthestructuralmodel BaseSpecifications Robustness Price(girls) (0.17)*** (0.14)*** (0.17)*** (0.04)*** (0.04)*** (0.04)*** (0.04)*** (0.04)*** Price(boys) (0.18)*** (0.14)*** (0.04)*** (0.04)*** (0.04)*** (0.04)*** (0.04)*** (0.04)*** c(girls) (0.08) (0.03)* (0.08) (0.05)** (0.05)** (0.05)** (0.12)* (0.41) c(boys) (0.05) (0.05) (0.43)* (0.37)* (0.40)* (0.47)* (0.94) (5.50) Price(boys)Price(girls) (0.26) (0.18) c(boys)c(girls) (0.09) (0.02) (0.43) (0.34)* (0.37) (0.45) (0.88) (5.31) Rsq Obs Notes: Robust standard errors are reported in parentheses. The estimated parameters were derived from a nonlinear least squares regression. In Columns 1 and 2, the dependent variable is the agespecific variance in the residual dowry, the latter being obtained from a regression of dowry on a set of household variables interacted with age. In Columns 3 and 4, we set age 6 to be the starting year for boys. In Column 5, we restrict the sample to children up to the age of 17. In Column 6 we restrict the sample to children under the age of 16. In Column 7 the dependent variable is the variance in residual dowry, the latter obtained from a regression of dowry on the full set of household variables in levels. In Column 8, the dependent variable is the variance in therawdowry.
30 Expectedreturnstohighereducation * (inthousandsofrs) (0.12) (0.12) (0.09) (0.09) Expectedreturnstolowereducation 0.64** 0.55* (inthousandsofrs) (0.34) (0.34) (0.38) (0.39) Logarithmofhouseholdincome(Rs) 0.24* 0.23* (0.08) (0.09) (0.07) (0.07) Logarithmofhouseholdwealth(Rs) *** 0.13*** (0.06) (0.06) (0.04) (0.04) Educationlevelofdecisionmaker(inyears) 0.03*** 0.02** 0.04*** 0.03*** (0.01) (0.01) (0.01) (0.01) Numberofunmarriedboys * 0.09* (0.07) (0.07) (0.06) (0.05) Numberofunmarriedgirls (0.07) 0.07 (0.05) (0.04) Numberofadults (0.04) 0.04 (0.04) (0.03) Withingenderchildorder (0.09) 0.09 (0.06) (0.06) Overallchildorder 0.10** 0.11* 0.09* 0.08* (0.06) 0.06 (0.05) (0.05) Minimumeducationdesired 0.04 (inyears) 0.04 Maximumeducationdesired 0.02 (inyears) 0.03 Constant 6.48*** 6.16*** 7.06*** (0.69) (0.65) (0.60) Observations Rsquared
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