Household Income Mobility and Dowry: Evidence from India

Abstract

This paper examines the impact of dowry on household income mobility in Indian context. Dowry has many adverse effects in the society. Dowry, a key component of the extravagant wedding celebrations that are part of Indian culture, may act as a hindrance on efficacy of poverty alleviation programs. We utilize the two rounds of Indian Human Development Survey (IHDS) data to evaluate if dowry expenditure on a daughter’s marriage can explain the income mobility and possibly if it forces some households into poverty trap. Regression results suggest that dowry expenditure constitutes a significant financial burden to high income households contrary to the anecdotal belief that it more adversely affects lower income households.