Women as insurance assets in traditional societies: a study of bride-price in 18th-19th century China

Abstract

Before modern financial markets, agrarian societies relied on nonfinancial means to insure against risks. In particular, women were implicitly used as insurance assets—they were traded for other resources when the survival of a family was under threat. This practice was shared by different parts of the world though they had little or no connections with each other back then. To examine how women were used as insurance, this paper uses data from marriage-and adultery-related homicide case reports that are kept at the First National Historical Archives of China. From the 73,216 marriage/adultery homicide case reports covering the 1736-1895 period, we find 3,119 usable cases that contain price information on wife or concubine sale, widow remarriage and regular marriage. This dataset is used to investigate whether brideprice (i.e. the price of woman traded as wife or concubine, a term used hereafter) would decrease significantly when human survival risks were high. We employ grain price as a proxy for survival risks: high grain price signals shortage of food supply. When a drought or other types of natural disaster reduce crop output and drive up grain price, survival risks for ordinary people will increase. As a response, more wives or daughters will be sold for liquidity than usual. This increases the supply of women on the market, while demand is likely negatively affected at such times. The resulting imbalance leads to higher ―bride-price‖. We find that grain price had a significant impact on bride-price in 18th-19th century China: when grain price was high, bride-price would be low. Confucian norms also had a significant impact on bride-price: the deeper the Confucian influence (proxied by a larger number of chaste women) in a region, the lower the supply of women on the market and hence the higher the region‘s bride-price. Our two-stage estimation, using drought as an instrumental variable for grain price, shows that in a drought year grain price would increase by 10% and bride-price drop by 33%. Our findings support the hypothesis that, without financial markets, women were used as insurance assets. In this sense, financial markets are fundamental to liberate the individual, especially women, from being used as economic tools. Financial markets facilitate individual rights and freedom.