“Show Me the Money”:
An Analysis of Cost and Benefit for Local Governments to Recognize Same-Sex Marriage

Maurice Hong-Cheng Chang·

“Sexual Orientation is more like hunger than it is like desire for an invented product like a pizza.”[1]
“‘Autonomy as consent,’ [w]ith the assumption of self-sufficiency, will judge all exchanges as if they were made by voluntary consent. Cost-benefit evaluation will in the way interfere or compensate for this assumption, but will build on its basis as a fit point of departure for government-sanctioned public policy decisions.”[2]


Same-sex marriage policy is more often becoming a hot issue in international and national politics. Usually the concerned debates focus on the legal, political, religious and moral arguments. For instance, this April the Italian politicians in the center-left opposition in parliamentary elections, leading of Romano Prodi, who is Silvio Berlusconi's opponent for the premiership, have been divided over how far to go in granting rights to homosexuals who live together. The same issue also comes to the mayor electoral campaign in May following the national elections, particularly in Milan.

Milan is the Italian center of economies, finances, industries, fashion and design. D&G, one of the most famous Italian fashion designs in the world, locates its basement in Milan. The city hosts the gay film festival in April, gay pride parade in June and other gay scenes and activities happening during the whole year, which attract more than millions of tourists all over the world. These factors make Milan becomes one of the most gay-friendly and “laissez-faire” cities in the country. Arcigay, the local gay rights organization generated in Milan, absorbs nutrients from the soil and now becomes the powerful national gay rights activist. It is fair to say that the gay population gains the political visibilities and credits in this “open-closeted” city. These help account for the result that there were more fifty thousands of demonstrators rallied in Milan last Saturday, one thousand compared in Rome, to push for legal recognition for same-sex couples, which came two days after Pope Benedict XVI said it was wrong to give legal recognition to gay unions.[3] In this respect, it is without doubt a good sign for candidates who want to have more chances on winning the campaign of the mayor election.

The question then arises as to if the candidate is elected the mayor of the gay-friendly city, like Milan, will she/he keep the promise of legalizing same-sex partnerships and how far ahead of the policy, i.e. recognizing as registered partnership, civil union or to the end of same-sex marriage? Moreover, of which consideration should be taken account during the decision-making process of the “de-regulation” of marriage? The aim of this essay is to provide a briefly economic cost-benefit analysis to examine whether the restraint with respect to same-sex marriage, i.e. the “monopoly” of different-sex couples in the “market of marriage,” is efficient for local governments, like the Comune di Milano. It will be identified that the benefits provided by recognizing same-sex marriage not only apply to same-sex partners, but also to different-sex couples, the government and the society, as well as the costs thereof. However, marriage is an institution that is based on cultures, values and traditions, whose changes are neither easy to implement nor possible to predict. It has to show not only “the money,” but also the “social and cultural capital” for local governments in their decision-making process of recognizing same-sex marriage.

A Briefly Economic Analysis of Same-Sex marriage

Largely ignored during the debates legalizing same-sex marriage are their economic consequences, including the impact on government tax collections. A couple’s joint income tax burden can change with marriage. Many couples, especially two-earner couples with similar incomes, pay a marriage tax because their taxes when married are more than their combined tax liabilities as single filers. This feature of the income tax suggests that legalizing same-sex marriage would increase income tax revenues, because “gay and lesbian households are thought to consist primarily of two-earner couples.”[4] With several state courts[5] recognize the validity of same-sex marriage and the legislation of the Defense of Marriage Act (DOMA)[6], the federal and state governments of the United States began to take this issue seriously with respect of economies. In 2004, there were one federal official report and one state academic research released respectively. Both of them estimated that the potential impact of recognizing same-sex marriage would increase the federal budget by $1 billion in each of the next 10 years[7] and for the state of California’s budget by $22.3 to $25.2 million each year[8].

Recognizing Same-Sex Marriage: A Benefit or A Cost, and for Whom?

The interpretation of benefits and costs actually varies from different subjects and objects of regulatory policies. The values and ideals which support the policies can be benefits as well as costs from perspectives of same/different-sex couples, the local and national governments, societies and even marriage itself. For instance, the health care benefits for same-sex couples offer by the private sectors. If same-sex marriage is recognized by the national or local government, companies are required to provide equal benefits to same-sex couples, and then the benefits become the costs of the companies’ operations. In other words, the governmental burden of social security may be reduced because of these double benefits. Alas, for companies themselves, this offering can be seen as an investment – costs for short term but benefits in long term. Employers may use same-sex couple benefits to attract and retain productive workers in a tight labor market. This can be explained that in 1990, no Fortune 500 firms offered partner benefits, and in 2000, 102 companies, more than 20% do so;[9] it also explains a group of some of the biggest companies in the world, including Microsoft, Boeing and Nike stands out to support gay rights legislations and have provided some benefits for same-sex partners.

Benefits of Recognizing Same-Sex Marriage

Recognizing same-sex marriage in local governments, which promote long-lasting and stable relationship, may bring benefits for society as a whole. Because of this “safe-sex” commitment, same-sex marriage might reduce the risk of the transmission of venereal diseases and AIDS by promoting sexual faithfulness and by reducing the incentive of same-sex population to cluster in cities, so-called “search costs.”[10] Granting same-sex couples the right to marry might increase their self-esteem and make them accept their sexual orientation and identities and living happier. Gay workers and employees would be more productive and promote the economic growth of their companies. It also might contribute to support societal approval and reduce the social and governmental costs of discrimination and hatred.

For the local governments allowing same-sex marriage, the benefit is the impact on the governmental budget. According to the researching result of the UCLA Law School, there are four conclusions about this impact.[11] First of all, the local government will save money from expenditures on means-tested public benefit programs. Secondly, out-of-local/region same-sex couples will visit the city to marry, generating additional sales tax revenues through increased tourism. It is clear when the Canadian Government opened the door of marriage to same-sex couples, lots of Americans crossed the border to get married in Toronto or other cities in Canada. Thirdly, same-sex couples within the city will spend from their savings on weddings, creating additional sales tax revenues. Fourthly, marriage will impact some same-sex couples’ income taxes. Some couples’ taxes will rise and some couples’ taxes will fall as the resulting of marrying. Besides, the more protections the city offers to same-sex couples, the more same-sex and different-sex couples[12] will move into because they may think the city is more liberal, tolerant and diversely. It will promote the real estate market and business and the government will gain more estate tax revenues. The gay population in the city also creates the cultural developments.[13]

However, calculating the tax consequences for same-sex couples and their households is the most difficult problem for this empirical research. Because of their invisibilities, the number of lesbians and gay men in the overall population is a hotly debated issue. The number of same-sex partners is also uncertain, as is the number who would get married if “marriage” became an option. With respect to income taxes, some may argue that for lesbians and gay men, most of them are well-educated, occupied good positions in society. In other words, they are not educationally, socially or economically disadvantaged due to their backward classes. Yet, this is just another stereotype of “gay beauty,” and ignored the fact that lesbians and gay men are nothing else but ordinary members of our society. They may also be poor, ugly, without sense of arts and just human beings. Indeed, the precise definition of who is a lesbian and gay man is not without controversy.[14]

Costs of Recognizing Same-Sex Marriage

The costs of recognizing same-sex marriage might be tradition and informational costs, the problem of over-signaling, social cost of publicity of lesbians and gay men, the effect of stamp of approval, the argument of procreation and population, negative role model effect of children and so on.[15] Of course, these costs also have impact of the local governments’ budget, i.e. the government ought to pay more attentions and the regulation would be inefficient because of this “market failure.” Moreover, legalizing same-sex marriage might make lesbians and gay men come-out of the “closet” and will certainly show their sexual affection in public. This might be regarded as a negative external cost that is imposed on some people who feel offended and disgusted. More important, this would deepen the social hostility to lesbians and gay men and increase the hate crimes rate.

When marriage is extended to same-sex couples, private and public employers are forced to reassess employment and health care benefits to them. However, “the availability of employment fringe benefits will rather result in a shifting of costs from one employer to the other than increase the total amount of costs.”[16] The remaining costs due to higher payments are likely to be small, since the gay population is small. Most important, the discrimination based on sexual orientation cannot be justified on economic grounds, e.g. under the principle of equal pay and equal treatment of article 141 of the EC Treaty.

Costs of local governments recognizing same-sex marriage might occur in areas of social security[17], veterans’ benefits, employment benefits, inter-government succession, adoption and custody and other transaction costs.[18] Critics of same-sex marriage also contend that its recognition would bring an informational cost by diluting or obscuring the meaning of marriage. If same-sex marriage was recognized, the assumption of marriage no longer holds, thereby imposing and informational cost.[19]

Probably the most overt cost burdening on local governments allowing same-sex marriage is the regulatory and implemental costs. Before recognizing same-sex marriage, the governments might have legislative costs on drafting legal proposal, lobbying legislators and advertising the policy. They have to do researches on how to adjust the current legal system with same-sex marriage. The governments might change the existed procedurals for applying same-sex couples, such as revising the marriage registered forms and licenses. They also have to increase the training costs for concerned officials to deal with cases of same-sex marriage and other costs of litigation and legal advice.

Weighting the Benefits against the Costs

Formally, a same-sex marriage will be chosen over any other its alternative, e.g. a registered partnership or civil union if

(B1-C1)>0, (B1-C1)>(B2-C2), (1)

where B1 and B2 are benefits of the same-sex marriage and its alternative, respectively, to a particular local government and C1 and C2 are the respective costs to her. The reason for the first condition is that if the net benefit of same-sex marriage, though greater than that of its alternative, is zero or negative, the local government will choose abstinence instead. The second condition in (1) can be rewritten as followed:

(B1-B2)>(C1-C2). (2)[20]

This helps us see that even if the local government prefers same-sex marriage to, say, a civil union, if the cost of the former is greater (perhaps because of religious riots or because political oppositions), her may substitute the civil union unless her aversion to it is very great. For example, let B1 and B2 be 10 and 5, C1 and C2 9 and 1 respectively. Then even though the government prefers the same-sex marriage both to abstinence (because (B1-C1)>0) and to the civil union (because B1>B2), her will recognize the civil union because B1-B2=5 is less than C1-C2=8, or equivalently, from inequality (1), because the net benefit of the same-sex marriage, B1-C1=1, is less than that of the civil union, B2-C2=4. In any event, and perhaps most importantly, same-sex couples might well choose to get married because of the cultural symbolism and value that married status conveys to themselves, their families, and society, rather than considering benefits and costs as shown above.

Value for Money? Cultural Capital of Same-Sex Marriage

When we have an economic analysis of same-sex marriage, we mainly focus on the costs and benefits associated with marriage itself. This is not to deny that we do not have to consider the costs and benefits of changing values, cultures and traditions which the marriage is based on. However, what should be taking seriously in this “game of capital”? It is helpful to insights of the further analysis by quoting from the theory of French Sociologist Pierre Bourdieu. In his phrase, capitals are “synonymous” and transferable. Cultural capital may be indirectly transferable into economic advantages in the case of same-sex marriage. With a habitus of marriage and family, gender is actually a form of capital that transfers into financial and economic advantages and benefits underlying the family and marriage. Family and marriage are the foundation for social capital generating “trust and networks and explicitly linking their measurement to economic growth and the health and well being of populations.”

Social capital, as Bourdieu said, is a combination of economic capital, cultural capital -- institutional status and personal values, and symbolic capital -- legitimate construction of other capital with symbolic power. He also sees families as motors of social capital -- reproduces gendered habitus and maintains this social order. The status of marriage and intimate relations therefore somehow describes the social processes and practices individuals engaged in. With this “disclosing intimacy”, the notion of marriage moves from social obligation to negotiated intimacy. This is the “contractualization” of marriage[21], or sociologists called “democratization of personal relationships.”[22]

There are several economizing features when we discuss about marital relationship, which involve not only the commitment and mutual support, but also include the division of labor, joint consumption, “the promotion of marriage-specific investments such as children, the savings of transaction costs and the pooling of risk”[23] and so on. Same-sex marriage represent “an ideal model of postmodern kinship because their conscious efforts to devise intimate relationships are free from the constraints and the benefits of traditional patterns of family life.”[24] The positive values of love, responsibility and intimacy of same-sex marriage also reproduce the symbolic capital on their egalitarian notion and democratic negotiation.

Moreover, confirming same-sex couples with the right to marriage presents a symbolic power in gay politics. Bourdieu said “appearances always support appearance.”[25] And I will add that, not just appearance but appearance with pride – same-sex marriage expresses the breakdown of being second-class citizens. Some arguments suggest that other separate but equal alternatives of marriage for same-sex couples are acceptable, as long as they are indeed formally equal – provide all the obligations as well as all most the benefits of marriage but not the name. They ignore the fact that these alternative institutions are a product of political compromise “envisioned and created by the heterosexual majority for the purpose of maintaining the segregation of homosexuals and warding off an ultimate ruling by a court in favor of equal marriage rights.”[26]

Others then argue that there are unique characteristics of the gay culture and life styles between lesbians and gay men, which make the exclusion of same-sex couples from marriage rational and legitimate. Even if there are differences of habitus and practice between same-sex and opposite-sex couples, does same-sex marriage remain inferior just “for the sake of being different?”[27] Queer theorists opposed to same-sex marriage also argue that “there are often more fundamental reconfigurations of the family, intimacy, and gender relationships, not to mention suspicion of the state,” why should this dominant conception of marriage remain the only point of entry into state protection? My answer will be that marriage is the sole legal gateway to a vast array of tangible and intangible protections and benefits, most of which cannot be replicated in any other way. The name of marriage is indeed the cultural capital and has the symbolic power in our society. This is also what John Martin Gillroy calls the “ethical questions” and “moral ground” for decision-making and judging the ends of public policy.[28]

Concluding Remarks:
The “Ripples Effect” and Recognition of Same-Sex Marriage

If we see the marriage as a market, the same-sex marriage ban makes the different-sex couples have the monopoly. Some parts of marriage need to be standardized; other elements ought to be matters of individual choice, and monopoly reduces this individual choice, or “autonomy.”[29] The economic cost-benefit analysis is generally used in the decision-making process of the state economic and social welfare policies. But, for the moral policies, such as gay rights, abortion, pornography and so on, conventional legal studies usually carry them nowhere in this “troubled field of law,” and the emotional, stereotyped and taboo character of the underlying phenomena makes common sense an unreliable guide. The economic analysis of same-sex marriage may lead us to predict the appearance of other moral policies on the legislative agenda, and it is important to understand the process by which these are, or are not, adopted. In such a volume as this, only a bare general sketch can be given of identifying the possible variables of costs and benefits of recognizing same-sex marriage in the level of local governments. The full study of empirical effects of the variations and the policy implementation in the national level lies outside the scope of the essay. In this field of recognizing same-sex marriage, other actors, like gay rights organizations, public intellectuals and courts – religious affiliation of politicians, legislators and judges, national or international, and other socio-legal elements – legal culture, citizen ideology and interest organization mobilization[30] and urbanization, are also worthy of further research.

Recently there are two base-breaking developments on recognizing same-sex partnerships in Europe. In July 2005, Spain became the third European country to legalize same-sex marriage, following the Netherlands and Belgium. Different with the later two countries, Spain is a scared country, which the Catholic Church occupies a strong and powerful influences in politics and society. Another well-known conservative country the United Kingdom then granted same-sex couples the right to civil union in December 5, 2005. There is an interesting implementing result in these two public policies. There are fewer protests against same-sex marriage in Spanish local governments rather than civil union in Britain. Since 1993, there were several regional and local governments legalizing same-sex partnerships and promoting gay rights equality policies, it is fair to say that this bottom-up approach can reduce the costs and oppositions when the recognizing same-sex marriage policy implements through the national level.[31] The relationship between the “ripples effect,” as I called it, and the gay rights issues, such as same-sex marriage, would be an interesting point to observe how the Spanish policy of same-sex marriage is implementing and what we can learn from it.

Main References

Alm, James Robert, Badgett, M.V. Lee and Whittington, Leslie A.. “Wedding Bell Blues: The Income Tax Consequences of Legalizing Same-Sex Marriage,” 53(2) National Tax Journal 201 (2000).
Congressional Budget Office, “The Potential Budgetary Impact of Recognizing Same-Sex Marriage,” June 21, 2004.
Jakobsen, Janet R.. “Can Homosexuals End Western Civilization As We Know It? Family Values in a Global Economy,” in Arnaldo Cruz-Malavé & Martin F. Manalansan IV eds., Queer Globalizations: Citizenship and the Afterlife of Colonialism 49-70. New York: New York University Press, 2002. [Hereinafter Queer Globalization]
Müller, Christina. “An Economic Analysis of Same-Sex Marriage,” 2002(14) German Working Papers in Law and Economics 1 (2002).
Nishimoto, Ryan. “Marriage Makes Cents: How Law & Economics Justifies Same-Sex Marriage,” 23(2) Boston College Third World Law Journal 379 (2003).
Pellegrini, Ann. “Consuming Lifestyle: Commodity Capitalism and Transformations in Gay Identity,” in Queer Globalization 134-148.
Posner, Richard A.. “Economics and the Social Construction of Homosexuality,” in Overcoming Law 553-578. Cambridge: Harvard University Press, 1995.
Ribstein, Larry E.. “A Standard Form Approach to Same-Sex Marriage,” paper prepared for “The Implications of Lawrence and Goodridge for Recognition of Same-Sex Marriages and for the Validity of DOMA,” Catholic University, May 20, 2004.
Soule, Sarah A.. “Going to the Chapel? Same-Sex Marriage Bans in the United Sttates, 1973-2000,” 51(4) Social problems 453-477 (2004).
William Project on Sexual Orientation Law and Public Policy, UCLA School of Law & institute for Gay and lesbian Strategic Studies, Dept. of Economics, University of Massachusetts Amherst, “The Impact on California’s Budget of Allowing Same-Sex Couples to Marry,” May 2004.


· In this essay the citation is according to The Bluebook: A Uniform System of Citation, which is published by the Harvard Law Review Association.
[1] Richard A. Posner, Economics and the Social Construction of Homosexuality, in Overcoming Law 553-578, at 575 (1995).
[2] John Martin Gillroy, The Ethical Poverty of Cost-Benefit Methods: Autonomy, Efficiency, and Public Policy Choice, in The Moral Dimensions of Public Policy Choice: Beyond the Market Paradigm 195-215, at 203 (John Martin Gillroy & Maurice Wade eds., 1992)[hereinafter Ethical Poverty of Cost-Benefit Methods].
[3] See e.g. relevant news reports at .
[4] James Robert Alm, M.V. Lee Badgett, and Leslie A. Whittington, Wedding Bell Blues: The Income Tax Consequences of Legalizing Same-Sex Marriage, 53(2) National Tax Journal 201, at 202-203 (2000)[hereinafter Alm et al., Wedding Bell Blues].
[5] The state supreme courts issued landmark decisions to grant same-sex couples the right to civil union in Vermont in 2001, and to allow same-sex marriage in Massachusetts in 2004. See respectively Baker v. State of Vermont, 744 A. 2d. 864, 1999 WL 1211709 (Vt. 1999); Goodridge v. Department of Mental Health, 440 Mass. 309, No. SJC-08860 (Ma. 2003).
[6] For an economic analysis of DOMA’s effects on federal budget, see Gay & Lesbian Advocates & Defenders (GLAD), Is DOMA Doomed?: The Federal “Defense of Marriage Act” and State Anti-Gay, Anti-Marriage Laws (2001), at .
[7] Congressional Budget Office, The Potential Budgetary Impact of Recognizing Same-Sex Marriage (June 21, 2004), available at [hereinafter CBO, The Potential Budgetary Impact].
[8] William Project on Sexual Orientation Law and Public Policy, UCLA School of Law & institute for Gay and lesbian Strategic Studies, Dept. of Economics, University of Massachusetts Amherst, The Impact on California’s Budget of Allowing Same-Sex Couples to Marry (May 2004), available at [hereinafter Williams Project, Impact of Allowing Same-Sex Marriage].
[9] See M.V. Lee Badgett, Calculating Costs with Credibility: Health Care Benefits for Domestic Partners, 5(1) Angles: The Policy Journal of the Institute for Gay and Lesbian Strategic Studies 1 (2000).
[10] See Richard A. Posner, Sex and Reason 119-133 (1992)[hereinafter Sex and Reason].
[11] Williams Project, Impact of Allowing Same-Sex Marriage, supra note 8, at 15.
[12] Certainly, there are anti-gay population will move out of the city allowing same-sex marriage. However, the possibility and percentage is less than supposing. See Posner, Economics and the Social Construction of Homosexuality, supra note 1, at 553.
[13] See Richard Florida, The Rise of the Creative Class (2002).
[14] See Alm et al., Wedding Bell Blues, supra note 4, at 205-207; Williams Project, Impact of Allowing Same-Sex Marriage, supra note 8, at 3-4.
[15] Christina Müller, An Economic Analysis of Same-Sex Marriage, 2002(14) German Working Papers in Law and Economics 1, at 17-21 (2002)[hereinafter Economic Analysis of Same-Sex Marriage].
[16] Id. at 21.
[17] CBO, The Potential Budgetary Impact, supra note 7, at 5-7.
[18] Ryan Nishimoto, Marriage Makes Cents: How Law & Economics Justifies Same-Sex Marriage, 23(2) Boston College Third World Law Journal 379, at 387 (2003)[hereinafter Marriage Makes Cents].
[19] Nishimoto, Marriage Makes Cents, supra note 17, at 396.
[20] This formula is quoted from discussion of the homosexual act and sodomy law by Judge Posner, see Posner, Economics and the Social Construction of Homosexuality, supra note 1, at 557.
[21] See Posner, Sex and Reason, supra note 10, at 569-570.
[22] See generally Val Gillies, Family and Intimate Relationships: A Review of the Sociological Research, in Families & Social Capital ESRC Research Group Working Paper, No. 2 (2003).
[23] See Müller, Economic Analysis of Same-Sex Marriage, supra note 15, at 4.
[24] See Sondra E. Soloman, Esther D. Rothblum & Kimberly F. Balsam, Money, housework, sex, and conflict: same-sex couples in civil unions, those not in civil unions, and heterosexual married siblings, Sex Role, May 2005, at (as of 30 October 2005).
[25] See Pierre Bourdieu, Masculine Domination 114-115 (Richard Nice trans., 2001).
[26] See Yuval Merin, Equality for Same-Sex Couples: The Legal Recognition of Gay Partnerships in Europe and the United States 301 (2002).
[27] Id. at 302.
[28] See Gillroy, Ethical Poverty of Cost-Benefit Methods, supra note 2, at 213.
[29] Gillroy, Ethical Poverty of Cost-Benefit Methods, supra note 2, at 202-203.
[30] Sarah A. Soule, Going to the Chapel? Same-Sex Marriage Bans in the United Sttates, 1973-2000, 51(4) Social problems 453-477 (2004).
[31] See generally Raquel Platero, Linking Gender Equality and Sexual Orientation Policies. An Analysis of Local, Regional and National Equality Policies, paper for Delivery at the ECPR Joint Sessions of Granada, Workshop on “Inclusiveness of New Forms of Local Regional Political Decision Making in Terms of Gender and Ethnicity,” Granada, Spain, April 2005.

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