Table of Contents

Vanity Economics

Vanity Economics

An Economic Exploration of Sex, Marriage and Family

C. Simon Fan

This book presents an accessible and sometimes controversial economic exploration of numerous issues surrounding sex, marriage and family. It analyzes the role of ‘vanity’, defined as social status and self-esteem, in social and economic behaviors.

Chapter 11: Classical population theory

C. Simon Fan

Subjects: economics and finance, behavioural and experimental economics, institutional economics

Extract

This chapter introduces a new topic: children. I demonstrate in the following chapters (but not this chapter) that vanity plays a key role in many important decisions related to children in modern societies, such as whether to have children, how many to have and how much to invest in their education. Before studying the 'vanity theories of population', however, this chapter presents the classical population theory, in which vanity plays no role. The theory posits that, for most of human history, as with other animals, fertility has not really been a choice but simply a by-product of sex. As simple as it is, this theory is surprisingly powerful in explaining population and economic growth in ancient times. It also provides a comparison benchmark for modern fertility theories. Therefore this classical theory is still often taught in population and development economics courses today. The classical population theory was developed by Thomas Malthus (1798). Malthus's theory has three important components. First, humans have only two desires: food and sex. Second, there is a subsistence level to food consumption. If a person consumes below the subsistence level, they will die. However, once they obtain enough food to consume at the subsistence level, their only remaining desire is sex. Third, as a population increases, the wage rate decreases. These assumptions appear to be overly simplified in the contemporary world. But they made a great deal of sense in ancient times. For most of human history, people lived on farms and had simple consumption styles.

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