World gold prices, dowry and death in India

Sonia Bhalotra, Abhishek Chakravarty, Selim Gulesci 04 October 2018

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Dowry – a transfer of parental assets at the marriage of a daughter – is an ancient tradition, thought to date back to at least 200 BCE, which was widely prevalent in medieval western Europe. While this tradition has virtually disappeared with modernisation in most of the rest of the world, it persists in contemporary India and has become increasingly common in Bangladesh, Pakistan, and Sri Lanka (Botticini and Siow 2003). While the original dowry payments acted as a pre-mortem bequest to daughters that afforded them post-marital financial protection, property rights over dowry are now often appropriated by the groom or his parents rather than retained by the bride (Anderson and Bidner 2015). Dowry imposes a considerable tax on girls' families, with estimates indicating that it is often 4 to 8 times annual household income (Anderson 2007). Thus, families often start saving for dowry as soon as a girl is born (Browning and Subramaniam 1995).

Previous research has argued that dowry costs contribute to the phenomenon of Indian parents preferring to have sons rather than daughters (Miller 1981, Harris 1993)but there is as yet no systematic evidence of this or of how much it matters. Perhaps because dowry has officially been prohibited in India since 1961, representative time-series of data on dowry are not available, and this makes it hard to analyse it. Even if we had data on actual dowry transactions, it could be hard to isolate changes in the cost of dowry from the influence of family preferences or attributes. 

To address this challenge we leveraged variation in the financial burden of dowry created by variation in gold prices on the world market (Bhalotra et al.2018). Gold, typically in the form of jewellery, is an integral part of dowry in India and since India imports more than 90% of its gold (Reserve Bank of India 2013), fluctuations in the international price translate into fluctuations in the cost of dowry. 

We merged monthly data on international gold prices between 1972–2005 with monthly birth cohort data that include measures of boy and girl survival. Using this large data set with more than 100,000 observations, we found that in months of gold price inflation, the chances that a girl survived through the neonatal period (i.e. survived through to a month after birth) were significantly lower. Importantly, they were statistically significantly different from the chances that boys survived. In fact, gold price inflation appears to improve the survival chances of boys. We also found that girls born in months in which the gold price was increasing who survive through to adulthood are shorter. This ties in with parents depriving girls of nutritional inputs, it being well known from previous research that early life nutritional deprivation results in lower stature in adulthood (Bozzoli et al. 2009).

The influence of gold price variation on girl survival both in absolute terms and relative to boy survival is fairly large. A one standard deviation increase in the monthly price of gold during 1972–85 increased girl neonatal mortality by 6.4%, with no significant corresponding change in male neonatal mortality. We distinguished results for children born in 1986–2005, as ultrasound technology became widely available across India after the mid 1980s and previous research shows that parents shifted away from neglecting girls after birth to aborting unwanted girls before birth (Bhalotra and Cochrane 2010, Anukriti et al.2017). For these cohorts we find that a one standard deviation increase in the price of gold during pregnancy led to a significant 0.3% decline in the probability that a girl rather than a boy was born. Thus, by one means or the other, parents seem to react to gold price increases by acting to reduce the chances that they have a surviving girl child. Girls who survive beyond the foetal and neonatal period are shorter on account of early life neglect. A one standard deviation increase in gold price inflation in the birth year results in a 0.1 centimetre decrement in height.

In our research we conducted various tests of the stability of these results, and of our interpretation that they link back to dowry costs. For instance, we found that they hold even after we control for oil price shocks and rainfall deviations. We found that the results are stronger among less wealthy households. And we checked that the value of dowry tends to rise more or less proportionately with gold prices, suggesting that when gold prices go up people do not simply adjust to this by giving less gold in dowry.  

Recent government figures suggest that in India during 2013–15 only 900 girls were born for every 1,000 boys, indicating a continuing trend in the abortion of the girl foetus. This is despite persistent high economic growth and declining poverty in India over the past three decades. A number of research studies have identified specific ways in which Indian parents act to adjust the sex composition of their surviving births. For example, there is evidence that parental inputs including breastfeeding, doctors’ visits and nutrition favouring sons over daughters, and that parents abort girls significantly more than they abort boys. However, the literature on causes of discrimination against girls has focused upon geographic or institutional factors like soil quality (that determines crop choice and hence the productivity of women in agriculture) and kinship systems that determine how far married daughters live from the natal home (Carranza 2014, Dyson and Moore 1983). As these are time-invariant factors, they cannot explain trends in ‘missing girls’. Although the financial burden of dowry is often implicated, our recent research constitutes the first evidence that it contributes to a declining share of girls in the population, stemming from foeticide or neonatal neglect.

References

Anderson, S (2007), “The Economics of Dowry and Brideprice”, Journal of Economic Perspectives 21(4): 151–74. 

Anderson, S, and C Bidner (2015), “Property Rights over Marital Transfers”, The Quarterly Journal of Economics 130(3): 1421–84. 

Anukriti, S, S Kwon, and N Prakash (2017), “Dowry: Household Responses to Expected Marriage Payments”, working paper.

Bhalotra, S, A Chakravarty, and S Gulesci (2018), “The Price of Gold: Dowry and Death in India”, CEPR Discussion Paper 12712. 

Bhalotra, S, and T Cochrane (2010), “Where Have All the Young Girls Gone? Identification of Sex Selection in India”, IZA Discussion Paper 5381. 

Botticini, M, and A Siow (2003), “Why Dowries?”, American Economic Review 93(4): 1385–98. 

Bozzoli, C, A Deaton, and C Quintana-Domeque (2009), “Adult Height and Childhood Disease”, Demography 46(4): 647–69. 

Browning, M, and R Subramaniam (1995), “Gender-Bias in India: Parental Preferences or Marriage Costs”, Yale University.

Carranza, E (2014), “Soil Endowments, Female Labor Force Participation, and the Demographic Deficit of Women in India”, American Economic Journal: Applied Economics 6(4): 197–225. 

Dyson, T, and M Moore (1983), “On Kinship Structure, Female Autonomy, and Demographic Behavior in India”, Population and Development Review 9(1): 35. 

Harris, M (1993), “The Evolution of Human Gender Hierarchies: A Trial Formulation” in B D Miller(ed.), Sex and Gender Hierarchies, Cambridge University Press. 

Miller, B (1981), The Endangered Sex: Neglect of Female Children in Rural North India, Cornell University Press. 

Reserve Bank of India (2013), “Report of the Working Group to Study the Issues Related to Gold Imports and Gold Loans NBFCs in India”. 

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Professor of Economics, University of Essex

Lecturer in Economics, University of Manchester

Assistant Professor of Economics, Bocconi University

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