Marriage Markets and the Rise of Dowry in India

Dowry payments are common in many marriage markets. This paper uses data from India on over 70,000 marriages to explain why dowry emerges and how the institution evolves over time. Between 1930 and 1975, the proportion of Indian marriages with dowry doubled, and the average real value of payments tripled. We test whether five prominent theories of dowry can explain this rise, and find support for only one: dowry emerges due to increased differentiation in groom quality during modernization. We then show how a search model explains changes in dowry in later periods, including post-1975 declines in average dowry size.