Monday, May 08, 2006

Unintended Consequences, Chinese Divorce Edition

In matters of business, economic incentives matter. But in matters of love and marriage, it’s not about the incentives, it’s all about the cultural norms. Right? Well…

Authorities in China, to support the rapid industrialization of Chongqing, are confiscating large tracts of rural land nearby. You think eminent domain abuse is bad in the U.S.? Imagine what it’s like in a country where the government officially owns all the land in the first place. As compensation for the land they’ve lost, the government is offering the displaced villagers apartments in newly constructed housing projects. The result? A massive surge in the divorce rate:
As they [the villagers] understood the compensation deal, each married couple would receive a small two-bedroom apartment in return for their land and farmhouse. Those divorced would get a one-bedroom apartment each. The villagers figured that would be a better deal, that they could live in one apartment and make a little extra income from selling or renting out the extra one.

So, whereas farmers elsewhere took to the streets with their picks and plows demanding higher compensation in protests seen across the Chinese countryside, the folks in Renhe took a gamble with their marriages.

“Divorced? How could I not be divorced? It's now a local custom!” Yan [Shihai] said as he sat on the stoop outside his new apartment building with a handful of neighbors — all divorced, of course. “Even if we hate it, we have to do it. Divorce gives us a chance to sit on a longer bench. Don't get divorced, and you sit on a small stool or in the dirt.”
For the whole sad chain of unintended consequences, read the whole thing.

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