Why dowry payments declined with modernization in Europe but are rising in India

In contrast to most dowry-oriented societies in which payments have declined with modernization, those in India have undergone significant inflation over the last five decades. This paper explains the difference between these two experiences by focusing on the role played by caste. The theoretical model contrasts caste- and non-caste-based societies: in the former, there exists an inherited component to status (caste) that is independent of wealth, and in the latter, wealth is the primary determinant of status. Modernization is assumed to involve two components: increasing average wealth and increasing wealth dispersion within status (or caste) groups. The paper shows that, in caste-based societies, the increases in wealth dispersion that accompany modernization necessarily lead to increases in dowry payments, whereas in non-caste-based societies, increased dispersion has no real effect on dowry payments and increasing average wealth causes the payments to decline.