Is there a market in romantic relationships?



    MONTREAL, Feb. 12 /CNW Telbec/ - For Valentine's Day, the Montreal
Economic Institute is presenting an original analysis of the market strategies
and mechanisms that operate on online dating sites.
    In a special Economic Note, economist Mathieu Laberge explains that
"dating sites are 'markets in romantic relationships' in the sense that they
involve both supply and demand." The behaviour of men and women who are
looking for partners can be explained in part by strategies that economics can
help make understandable." The economic analysis here relies on data provided
by the popular Quebec dating site RéseauContact.

    Dating sites are markets

    A sizable potential market is involved here, and its extent can be
estimated by referring to the number of single adults who use the Internet for
social purposes. In Quebec, this amounts to about 600,000 people. Virtual
dating sites provide access to a much broader pool of single people than is
provided by traditional means such as bars, together with a "cataloging" of
potential candidates based on the preferences of those providing the demand.
These sites also form "markets for attention" since users are competing for
the time and effort of other users. As in any transaction, economics helps
explain the behaviour of users, who are influenced by the usual market
determinants: price, quantity, information, opportunity cost and scarcity,
among others.

    Scarcity is lucrative: beyond age 55, men are in demand

    The data that were gathered indicate that, after age 55, an increase can
be observed in demand for men compared to demand for women, as measured by the
average number of messages received. This can be explained by the smaller gap
between the number of men and women on site as well as by participants'
preferences for younger women and older men.

    You have to stand out to seduce someone

    For those 55 and under, the situation is reversed, and women are scarcer
than men in relative terms, increasing their "value" on the market in romantic
relationships. Given their relative abundance, men must seek to differentiate
themselves from one another. They can do so on RéseauContact by becoming
"privilege members", enabling them to send personalized messages. This service
also helps reduce the search time by identifying women who have shown an
interest in their particular files. Two times more men than women have
registered for this service.

    Transactions rely on credible information

    To increase the differentiation and credibility of the information
transmitted, members can add a "signal", as is said in economic jargon. The
most important signal is the presence of a picture, which seems to support the
veracity of the other information provided on physical appearance.

    Dating also involves opportunity cost

    Traditional forms of dating are costly in terms of time, and dating sites
reduce this cost of seeking a partner. A user's opportunity cost is estimated
as being the value of an hour's work, and it thus varies according to an
individual's salary. The greater efficiency of dating sites is an economic
incentive that promotes the participation of more men and more people who are
well off financially. Single people who are adepts of online dating also tend
to be more highly educated than the general public. The more this is the case,
the most valuable their time is, and the more economical they are with their
time online. Given that women are less likely to frequent dating sites, men
spend more time than women of similar income in seeking a partner.

    The Economic Note titled Is there a market in romantic relationships? was
prepared by Mathieu Laberge, an economist with the Montreal Economic Institute
and holder of a master's degree in international economics and econometrics
from the University of Nottingham

    The Note is available at www.iedm.org

    The Montreal Economic Institute is an independent, non-partisan,
non-profit body that takes part in public policy debate in Quebec and across
Canada, offering wealth creation solutions on matters of taxation, regulation,
and reform of health and education systems. Its publications since 2000 have
included the Report Card on Quebec's Secondary Schools. In 2004 it won a
Templeton Freedom Award for Institute Excellence for the quality of its
management and public relations.




For further information:

For further information: and interview requests: André Valiquette,
Director of Communications, Montreal Economic Institute, (514) 273-0969 ext.
2225, Cell: (514) 574-0969, avaliquette@iedm.org


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