SSEES0042
Economics of the Family
Main Exam Period
2023/24
Essay questions (25 points)
Use the concepts studied in class and during the lectures to answer the following questions. Provide structured arguments that show the thinking process you have gone through. Answers are expected to be no more than 200 words. Each question is worth 5 points.
1. Is there any significant difference in the propensity to use online dating apps among the heterosexual and LGBTQ+ communities? Explain your answer using the concept of intensive and extensive search costs.
2. This figure shows statistics on living arrangements over time in the United States. Describe the evolution of one-person households vs married couples. What does this figure suggest about the evolution of gains from marriage? Cite two factors that could help explain this evolution.
3. In many cases people who have the same profession end up
together. Explain some advantages and disadvantages of this match, using the concepts discussed in the class and appropriate economic vocabulary.
4. According to folk knowledge on heterosexual relationships, (i) men tend to prefer younger partner, and (ii) people date within their “leagues” (i.e. based on perceived attractiveness). Does research support the existence of these two patterns?
5. Becker (1974) was the first economist to make theoretical
predictions about assortative mating in heterosexual couples.
Jepsen and Jepsen (2002) tested his prediction and extended the test to homosexual couples. Explain Becker’s predictions and Jepsen and Jepsen’s results.
Exercise 1 (7.5 points)
Each question is worth 2.5 points.
1. In a heterosexual and monogamous marriage market, men and
women seek to match. In the matrix below, the first number gives you men’s ranking of women, the second the women’s ranking of men. Solve for the equilibrium using the Gale-Shapley algorithm, when men propose.
|
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Anna
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Betty
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Christina
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Dana
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Eva
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Frank
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4, 5
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2, 3
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1, 3
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3, 5
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5, 4
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George
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5, 4
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4, 2
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3, 4
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2, 1
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1, 2
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Harry
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1, 3
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3, 1
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5, 5
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4, 2
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2, 1
|
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Ian
|
1, 2
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5, 5
|
4, 1
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3, 3
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2, 3
|
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James
|
5, 1
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2, 4
|
4, 2
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3, 4
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1, 5
|
2. Solve the same matching problem – but this time with the women proposing. Find the equilibrium when: (i) Anna proposes first, then Betty, Christina, Dana and Eva; (ii) Eva proposes first, then Dana, Christina, Betty and Anna; (iii) Anna proposes first, then Eva, Betty, Dana and Christina.
3. Is there such a thing as a first-mover advantage in this market?
Would you expect a first-mover advantage to happen on a matching market where 5 students and 5 London universities are matched according to the Gale-Shapley algorithm? Why yes or why not?
Exercise 2 (7.5 points)
Each question is worth 2.5 points.
In 2000, a country had a population of 8.07 million. By 2020, the population increased to 8.44 million. Moreover, for 2000 and 2020, the number of women by age and the number of births to women of a given age is given in the table below (e.g. in 2000, there were 9782 births to the 77880 women aged 25).
1. Calculate the Crude Birth Rate in 2000 and 2020.
2. Calculate the Total Fertility Rate in 2000 and 2020.
3. Why are the two measures not equal when the two rates are
supposed to measure the same phenomenon - fertility?