Title：Incomplete information within Marriage: Buying House as the Signal of Commitment
Speaker：Kun Bao
Abstract：This paper studies how marital commitment affect couple’s post-marriage investment in common assets. Unlike previous studies that assumed complete information within marriage, we developed the Nash Bargaining Model by considering the signaling behavior when the spouses are under incomplete information. Employing the China Family Panel Studies (CFPS) data in the 2010-2016 period and treating the implementation of the new marriage law in 2011 as an external shock, we identified this signaling behavior by finding that the legal shock boosted the number of house property owned by couples by 6.1% on average. This finding is robust to various checks including using the number of “jinshi” in local history to proxy the prevalence of Confucian culture as instruments. We also provide evidence showing the mechanism that the legal shock decreased the amounts of commitment between spouses and the house serve as a “signaling vehicle” to the spousal relationship. Our findings thus highlight the important role that commitment plays in the welfare of households, and provide a new perspective of understanding marriage law and spousal interaction in China.
About speaker：
Kun Bao is an assistant professor at the School of Economics and Management in Beijing Jiaotong University. He received the Ph.D in economics from the University of Nottingham in U.K.. His research areas are labor economics, behavioral economics and family economics.
Date: Thursday, June 9, 2022
Time: 12:30-1:50pm.
Tencent meeting ID: 343-5500-0633