TY  - JOUR
A1  - Rao Sahib, Padma
A1  - Gu, Xinhua
T1  - To Tie the Knot or Not: Cohabitation, Marriage and Individuals' Attitudes to Risk
Y1  - 2002/05/23
JF  - Demographic Research
JO  - Demographic Research
SN  - 1435-9871
SP  - 355
EP  - 382
DO  - 10.4054/DemRes.2002.6.13
VL  - 6
IS  - 13
UR  - https://www.demographic-research.org/volumes/vol6/13/
L1  - https://www.demographic-research.org/volumes/vol6/13/6-13.pdf
L2  - https://www.demographic-research.org/volumes/vol6/13/6-13.pdf
N2  - This paper introduces imperfect information, learning, and risk aversion in a two sided matching model. The model provides a theoretical framework for the commonly occurring phenomenon of cohabitation followed by marriage, and is consistent with empirical findings on these institutions. 

The paper has three major results. First, individuals set higher standards for marriage than for cohabitation.  When the true worth of a cohabiting partner is revealed, some cohabiting unions are converted into marriage while others are not. Second, individuals cohabit within classes. Third, the premium that compensates individuals for the higher risk involved in marriage over a cohabiting partnership is derived. This premium can be decomposed into two parts. The first part is a function of the individual's level of risk aversion, while the second part is a function of the difference in risk between marriage and cohabitation.

ER  -