Words by Ethan Penglase
Homo Economicus, a term used to describe the rational human-being assumed to exist by many economists. Homo economicus is characterised by their infinite ability to make perfectly rational decisions, i.e. decisions that maximise their utility for monetary and non-monetary gains. Many economic models rely on the assumption that we are all homo economicus but the concept has caused contention among modern behavioural economists and neuro-economists.
The purpose of this article isn’t to compare the arguments for or against the existence the of homo economicus but simply to introduce you to the concept because, whether or not homo economicus exists, we all know someone who thinks they are homo economicus. Now this man (it’s definitely a man) views every political issue through an economic lens. If a policy has an economic benefit, it’s good. If it doesn’t, it’s bad. Simple really.
By the time you read this you will have received a letter from the Australian Bureau of Statistics asking you one simple yes-or-no question: Should the law be changed to allow same-sex couples to marry? Many of you will not have voted yet and many of you do not even plan to vote. I’ve heard a lot of reasons for abstaining from voting over the past few weeks: ‘It doesn’t affect me, I don’t care either way’ and ‘it’s just a social issue, there are more important matters’. So, I decided to write this article for you guys, to convince you that same-sex marriage isn’t solely a social issue but an economic issue as well. If I can’t convince you that I deserve equal rights, perhaps I can convince you that I’ll contribute to GDP growth.
The most obvious way the legalisation of same-sex marriage will boost the Australian economy is through additional weddings. Economists at ANZ Bank, Cherelle Murphy and Mandeep Kaura, calculated that this boost would be worth at least $500 million in just the first year of marriage equality, with the total economic benefited being as much as $1 billion if half of same-sex couples choose to marry within the first year! These figures are based on the fact that the average spend per wedding is $51,000 and that there are approximately 38,000 same sex couples in Australia. Their report finds that the beneficiaries of this fresh demand would be small businesses and the services sector. Other immediate economic benefits include wedding-related expenditure (hospitality, recreation and professional services), service exports as foreign same-sex couples come to Australia to get married, increased state government revenue from license fees and a small boost to consumer confidence.
Beyond this, there will be some flow on effects from legalising SSM that will benefit the economy. Research shows that legal discrimination and social exclusion cause above-average levels of stress and mental health problems for gay and lesbian people. UBS economist Paul Donovan believes that legalising SSM would combat homophobia in the workplace, or what he calls ‘irrational discrimination’, and lead to an increase in labour productivity. For the fiscal conservatives reading this you will be happy to know that marriage also functions as an effective welfare safety net. Studies show that married couples are less likely to seek government assistance in times of personal crises such as sickness or job loss.
I hope, Mr Homo Economicus, I have convinced you that same-sex marriage is a worthy investment and that you are on your way to vote YES. I will leave you now with a word of advice for the future if you are ever again confronted with the arduous task of taking a side on a social issue. Discrimination, in all forms, is bad for business. People are more innovative when they are comfortable exchanging ideas among each other and more productive when they feel safe and respected at work. So fight institutional homophobia, fight discrimination and let’s all make some money.