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The threat of violence is often used as a means of redistributing resources. The Mafia extorts protection money from people under its control, and terrorists threaten hostages with death in order to extract concessions from governments. There is obviously a great deal of economic content in violent behavior and yet it has been neglected as a subject of research by most economists.1 One prominent example of economically motivated violence comes from the Indian subcontinent where numerous press reports indicate the widespread use of wife abuse as a means of extracting transfers from the wife's parents.2 In its most publicized form, disputes over the dowry give rise to what newspapers describe as "dowry murders," where wives are burned alive by their husband's families.3 Thus, "dowry" violence does not refer directly to marriage-related payments made at the time of the wedding, but to additional payments demanded after the marriage by the groom's family where the husband systematically abuses the wife in order to extract larger transfers. In this paper we conduct a case study of domestic violence in rural India focusing on its use as a bargaining instrument.
There is a small literature on the economics of domestic violence;4 Helen V. Tauchen et al. (1991) develop and test a noncooperative model of domestic violence finding that women with higher incomes face a lower risk of violence. Amy Farmer and Jill Tiefenthaler (1996) theoretically examine how the use of shelters can serve as a signal of a woman's tolerance of violence. More recently, Robert A. Pollak (2000) has constructed a model of the intergenerational transmission of domestic violence. The literature on intra-household bargaining is both more extensive and more empirical (Harold Alderman et al., 1995). Most of these studies follow the work of Marilyn Manser and Murray Brown (1980) and Marjorie B. McElroy and Mary-Jean Homey (1981), who develop cooperative models of bargaining within marriage with divorce as the threat point. Shelly Lundberg and Pollak (1993) extend this by allowing for an internal noncooperative threat point where the husband and wife live in "separate spheres."
Our paper differs from these literatures in various ways: It employs ethnographic information on the behaviors underlying dowry-related violence culled from open-ended interviews conducted in three villages in rural South India to inform...