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THE IMPORTANCE OF FINANCIAL CONSIDERATIONS IN DIVORCE DECISIONS
Author(s) -
PETERS H. ELIZABETH
Publication year - 1993
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1993.tb00867.x
Subject(s) - economics , linkage (software) , opportunity cost , term (time) , actuarial science , finance , microeconomics , biochemistry , chemistry , physics , quantum mechanics , gene
This paper studies the linkage between the expected financial consequences of divorce and the decision to become divorced. A standard choice‐theoretic model predicts that the probability of divorce will be negatively related to the financial opportunity cost of divorce. This opportunity cost is measured as the difference in the present values of the future income streams that a married woman might expect if she were to stay married rather than become divorced. Our empirical results indicate that the expected short‐term financial consequences are a better predictor of subsequent divorce than are the longer‐term consequences.