While I am not happy the way Tim Harford responds to my economic wisdom, I am quite flattered I could reach out to the world's most influential people of business and finance who read FT.
Dear Economist: Resolving readers' dilemmas with the tools of Adam Smith
Should we rethink the reasons for divorce? The betting markets reckon Elin Nordegren will divorce Tiger Woods. Given the experiences of The wives of Shane
Warne and Bill Clinton, that seems hasty. Warne’s wife tolerated his scandals for years before divorcing him. Cricketers do not make as much money as golf stars, so the probability of her receiving a large alimony was low. Hillary Clinton had a much
lower probability of political success as a divorcee. should look at economic rather than emotional reasons for divorce.
Chetan S.
Dear Chetan,
You need to clarify your reasoning. You contrast Shane Warne's earnings with those of Tiger Woods, which suggests you have in mind some kind of income effect, where the richer the husband, the more likely the wife is to divorce him. This has the merit of being a falsifiable theory, but I am not sure it is true. Such cases belong instead to the theory of the firm. When two units of production - Hillary and Bill, say - are worth more together than they are separately, we call them "complementary assets", and there is a strong reason to keep them together. It's a question of how annoying the affairs are versus how strong the
complementaries are. Hillary and Bill are complementary assets; this is less obvious for Nordegren and Woods. As for a general theory, there is plenty of data - a project for a student of economics such as you?
Tim Harford
Questions to economist@ft.com
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