The most fundamental theory of economics is general equilibrium.  Markets clear via the forces of demand and supply.  Demand and supply in one market (e.g. cars) is affected by demand and supply in another (e.g. gas).

The forces of demand and supply can easily spillover into non-standard markets, especially in a recession.  As evidence, see this interesting Wall Street Journal article about Indian bachelors in the U.S. having  a hard time finding brides from back home.  The problem is that parents are worried about the long term prospects of the potential husbands, facing unemployment at any time in cutthroat America.  The demand for US-based grooms has gone down.  The supply of  grooms seems to be stable, at least that is what I infer from the WSJ article.  This means the “price” of marriage must go down.  The price of marriage is the dowry or more broadly the net transfer made to the groom.

First, the search services are charging more to Indian bachelors n the US. This means the net transfer to grooms has gone down. Second, resources should flow to the country where there are profits to be made.  And it seems Indian bachelors are moving back to the home country to take advantage of the better bridal economy.

The article does not say anything about dowries: the money, house, fridges, big-screen TV, Wii….transferred to the husband.   Dowries should get smaller or perhaps (finally!), there will be transfer from the husband to the wife’s parents.  That would be a wonderful new phenomenon.  But, since the supply of brides for Indian bachelors based in India  has gone up, the dowries should be getting larger there.  Darn it, change is never easy, as Barack Obama has found.  (The only countervailing effect is that the supply of Indian bachelors in India has increased as some move back from US to India.  Hence, the effect on the dowry is ambiguous.)

Empirical economists always benefit from change.  The wordwide recession should generate exogenous change in many markets allowing estimation of elasticity of demand and supply.  In the Indian bachelor market, as the demand curve for grooms moves, the elasticity of supply of grooms can be estimated (if there is good data!).  How sensitive are grooms to the size of the dowry?  If demand is elastic, very much so and money is paramount in marriage.  If it is inelastic, can we interpret this as saying grooms are looking for brides for love not money?  There’s a publication called the Economics of Jane Austen for someone willing to do the work.  This the kind of thing Steve Levitt is so good at.  But since he is moving to the Obama administration maybe some other bright young thing will write the paper.