Dowry: Bequest or Price?

Raj Arunachalam, University of California, Berkeley

Recent papers have modeled dowries as pre-mortem bequests to daughters or as groom-prices paid to in-laws. These two classes of models yield mutually exclusive predictions and contradictory policy prescriptions. Empirical tests have yielded mixed results. This paper explains the heterogeneity of findings by considering a heterogeneous world, in which some households use dowry as inheritance to daughters, while others use dowry to “purchase” desirable sons-in-law. We formally generate predictions from the two models and utilize the predictions in an exogenous switching regression with unknown sample separation in order to place households in the bequest or price regime. We test the empirical model on retrospective data from rural Bangladesh over a period of 85 years. We find considerable evidence of heterogeneity in dowry motives; that bequest dowries decline in prevalence and amount over time; and that bequest households are wealthier than price households. Our preliminary findings contradict arguments against banning dowries.