Property Rights and Transaction Costs in Marriage: Evidence from Prenuptial Contracts

Abstract

I examine prenuptial contracting behavior in early-nineteenth-centuiy Quebec to explore property rights within families and the efficacy of marital property laws. Drawing on a transaction cost framework, I examine the decision to sign a contract and couples' property rights choices. I find, for example, that couples signing contracts tended to choose joint ownership of property when wives were particularly important to the household. These findings illustrate the potential effects of legal institutions on individuals' behavior (such as the importance of family labor, human capital acquisition, and even mating decisions) and the value of a flexible legal environment.