Terms of endearment: An equilibrium model of sex and matching,” 2011. NBER Working Paper No

Abstract: We develop a two-sided directed search model of relationship formation that can be used to disentangle male and female preferences over partner character-istics and different relationship terms from only a cross-section of observed matches. Individuals direct their search for a partner on the basis of (i) the terms of the re-lationship, (ii) the partners ’ characteristics, and (iii) the endogenously determined probability of matching. Using data from National Longitudinal Study of Adoles-cent Health, we estimate an equilibrium matching model of high school relationships. Variation in gender ratios is used to uncover male and female preferences. Estimates from the structural model match subjective data on whether sex would occur in one’s ideal relationship. The estimates show that some women would ideally not have sex, but do so out of matching concerns; the reverse is true for men. Counterfactual sim-ulations show the matching environment black women face is the primary driver of the large differences in sexual activity among white and black women