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on Social Norms and Social Capital |
| By: | Calvo-Armengol, Antoni; Jackson, Matthew O. |
| Abstract: | We build a model where an individual sees higher returns to investments in human capital when their neighbors in a social network have higher levels of human capital. We show that the correlation of human capital across generations of a given family is directly related to the sensitivity of individual investment decisions to the state of the social network. Increasing the sensitivity leads to increased intergenerational correlation, as well as more costly investment decisions on average in the society. We calibrate a simple threshold version of the model to data from a variety of EU nations. We also show how directly analyzing sensitivity of decisions to social circumstances can lead to information that is not captured by intergenerational correlation. |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:clt:sswopa:1242&r=soc |
| By: | Francis Bloch; Garance Genicot |
| Keywords: | social networks, informal insurance. |
| JEL: | D85 D80 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:156&r=soc |
| By: | Emrah Arbak (GATE CNRS); Laurence Kranich |
| Abstract: | We model the interaction between an employer and a worker with interdependent preferences in a simple one-shot production process. In particular, we assume that the worker becomes kinder if she senses that her employer is an altruist. We assume that intentions are private information. Thus, the wage proposal signals the intentions of the employer to the worker. We show that if the workers have ”reasonable” beliefs, then the unique prediction of the game is a separating equilibrium outcome in which wages are fully informative about the intentions of the employer. However, if there are several employers simultaneously bidding to hire a single worker, then there may exist another equilibrium in which wages are completely uninformative. |
| Keywords: | Altruism, Reciprocity, Asymmetric information, Labor relations, Behavioral game theory |
| JEL: | C72 D82 J30 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:0511&r=soc |
| By: | Luigi Guiso (Graduate School of Business University of Chicago); Paola Sapienza |
| Keywords: | Culture, Exchange, Trust, Priors |
| JEL: | D84 F10 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:234&r=soc |
| By: | Jackson, Matthew O. |
| Abstract: | The science of social networks is a central field of sociological study, a major application of random graph theory, and an emerging area of study by economists, statistical physicists and computer scientists. While these literatures are (slowly) becoming aware of each other, and on occasion drawing from one another, they are still largely distinct in their methods, interests, and goals. Here, my aim is to provide some perspective on the research from these literatures, with a focus on the formal modeling of social networks and the two major types of models: those based on random graphs and those based on game theoretic reasoning. I highlight some of the strengths, weaknesses, and potential synergies between these two network modeling approaches. |
| Keywords: | networks, social networks, network games, network formation, game theory |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:clt:sswopa:1237&r=soc |
| By: | Weibull, Jörgen (Dept. of Economics, Stockholm School of Economics); Villa, Edgar (Boston University) |
| Abstract: | We analyze the interplay between economic incentives and social norms when individuals decide whether or not to engage in criminal activity. More specifically, we assume that there is a social norm against criminal activity and that deviations from the norm result in feelings of guilt or shame. The intensity of these feelings is here endogenous in the sense that they are stronger when the population fraction obeying the norm is larger. As a consequence, a gradual reduction of the sanctions against criminal activity, or of the taxation of legal incomes, may weaken the social norm against crime. Due to the potential multiplicity of equilibria in our model, such a gradual change may even induce a discontinuous increase in the crime rate. We show that law enforcement policies may have dramatic and permanent efects on the crime rate, and lead to hysteresis. We also define political equilibrium under majority rule and show how a majority of individuals, who feel no guilt or shame from violating the law, in political equilibrium can exploit a minority who do have such feelings. |
| Keywords: | crime; punishment; social norm; political equilibrium |
| JEL: | D11 D72 |
| Date: | 2005–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hastef:0610&r=soc |
| By: | Marie-Claire Villeval (GATE CNRS); Bernard Fortin; Guy Lacroix |
| Abstract: | The paper extends the standard tax evasion model by allowing for social interactions. In Manski’s (1993) nomenclature, our model takes into account social conformity effects (i.e., endogenous interactions), fairness effects (i.e., exogenous interactions) and sorting effects (i.e., correlated effects). Our model is tested using experimental data. Participants must decide how much income to report given their tax rate and audit probability, and given those faced by the other members of their group as well as their mean reported income. The estimation is based on a two-limit simultaneous tobit with fixed group effects. A unique social equilibrium exists when the model satisfies coherency conditions. In line with Brock and Durlauf (2001b), the intrinsic nonlinearity between individual and group responses is sufficient to identify the model without imposing any exclusion restrictions. Our results are consistent with fairness effects but reject social conformity and correlated effects. |
| Keywords: | Social interactions, Tax evasion, Simultaneous tobit, Laboratory experiments |
| JEL: | C24 C92 D63 H26 Z13 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:0410&r=soc |
| By: | Antonio Cabrales; Antoni Calvo-Armengol; Nicola Pavoni (Department of Economics University College of London) |
| Keywords: | Social Preferences, Skill Segregation, Internal Labor Market. |
| JEL: | E24 J31 J41 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:205&r=soc |
| By: | Emrah Arbak (GATE CNRS) |
| Abstract: | We consider a large population of agents choosing either to engage in a criminal activity or working. Individuals feel varying degrees of selfreproach if they commit criminal acts. In addition, they are concerned with their social status in society, based on others’ perceptions of their values. In making their decisions, individuals weigh both the material and social risks of being a criminal and a worker. We find that introducing social status concerns may induce multiple equilibria. We also consider the implications of intragroup and intergroup interactions in an economy with two classes of earning abilities. Typically, there is more crime in the low ability group and increasing punishment reduces crime, but the opposite may also be true. |
| Keywords: | Crime, Social identity, Asymmetric information, Behavioral game theory |
| JEL: | C72 D82 K42 Z13 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:0510&r=soc |
| By: | Sirisha C. Naidu (University of Massachusetts Amherst) |
| Abstract: | This paper explores the role of group heterogeneity in collective action among forest communities in northwestern Himalayas. Based on data from 54 forest communities in Himachal Pradesh, India, this paper finds that heterogeneity has at least three dimensions: wealth, social identity and interest in the resource, and each may significantly affect collective actions related to natural resource management. However, their effects are far from simple and linear. The empirical results suggest that cooperation need not depend on caste parochialism, that very high levels of wealth heterogeneity can reduce cooperation, and that there can be a divergence between ability and incentive to cooperate which reduces the level of cooperation in the community. |
| Keywords: | common pool resources, group outcomes, heterogeneity, forests, Himachal Pradesh |
| JEL: | D63 D71 H41 Q23 |
| Date: | 2005–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpot:0511004&r=soc |
| By: | Giorgio Fagiolo; Marco Valente; Nicolaas J. Vriend |
| Abstract: | Schelling (1969, 1971, 1971, 1978) considered a simple model with individual agents who only care about the types of people living in their own local neighborhood. The spatial structure was represented by a one- or two-dimensional lattice. Schelling showed that an integrated society will generally unravel into a rather segregated one even though no individual agent strictly prefers this. We make a first step to generalize the spatial proximity model to a proximity model of segregation. That is, we examine models with individual agents who interact 'locally' in a range of network structures with topological properties that are different from those of regular lattices. Assuming mild preferences about with whom they interact, we study best-response dynamics in random and regular non-directed graphs as well as in small-world and scale-free networks. Our main result is that the system attains levels of segregation that are in line with those reached in the lattice-based spatial proximity model. In other words, mild proximity preferences can explain segregation not just in regular spatial networks but also in more general social networks. Furthermore, segregation levels do not dramatically vary across different network structures. That is, Schelling's original results seem to be robust also to the structural properties of the network. |
| Keywords: | Spatial proximity model, Social segregation, Schelling, Proximity preferences, Social networks, Undirected graphs, Best-response dynamics. |
| Date: | 2005–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2005/22&r=soc |
| By: | Cesar Martinelli; Helios Herrera (CIE Instituto Tecnologico Autonomo de Mexico) |
| Keywords: | Voter's Paradox, Endogenous Leaders |
| JEL: | D72 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:687&r=soc |
| By: | Subhayu Bandyopadhyay; Cletus C. Coughlin; Howard J. Wall |
| Abstract: | This paper provides new estimates of the effects of ethnic network on U.S. exports. In line with recent research, our dataset is a panel of exports from U.S. states to 29 foreign countries. Our analysis departs from the literature in two ways, both of which have noteworthy empirical consequences. Our main departure is to remove the restriction that the network effect is the same for all ethnicities. In addition, because our dataset contains a time dimension, we are able to control for unobserved heterogeneity with properly specified fixed effects. We find that ethnic-network effects are much larger than has been estimated previously, although they are important only for a subset of countries. |
| Keywords: | Exports ; Regional economics |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2005-069&r=soc |
| By: | Javier Herrera (DIAL, IRD, Paris); Mireille Razafindrakoto (DIAL, IRD, Paris); François Roubaud (DIAL, IRD, Paris) |
| Abstract: | (english) Public statistics face quite a challenge when it comes to measuring new dimensions of development (institutions, governance, and social and political participation). To take up this challenge, modules on Governance, Democracy and Multiple Dimensions of Poverty have been appended to household surveys by National Statistics Institutes in twelve African and Latin-American developing countries. This paper presents the issues addressed and the methodological lessons learnt along with a selection of findings to illustrate this innovative approach and demonstrate its analytic potential. We investigate, for instance, the population’s support for democratic principles, the respect for civil and political rights and the trust in the political class; the “need for the State”, particularly of the poorest; the extent of petty corruption; the reliability of expert surveys on governance; the perception of decentralisation policies at local level; the level and vitality of social and political participation, etc. The conclusive appraisal made opens up prospects for the national statistical information systems in the developing countries. The measurement and tracking of this new set of objective and subjective public policy monitoring indicators would benefit from being made systematic. _________________________________ (français) La mesure des nouvelles dimensions du développement (institutions, gouvernance, participation, sociale et politique) pose un redoutable défi à la statistique publique. Pour y répondre, des modules thématiques sur la Gouvernance, la Démocratie et les Multiples Dimensions de la Pauvreté ont été greffés sur des enquêtes auprès des ménages réalisées par les Instituts Nationaux de la Statistique de douze pays en développement, africains et latino américains. On présente ici les enjeux et les enseignements méthodologiques de cette expérience, ainsi qu’une sélection de résultats illustratifs de cette approche novatrice. On s'interroge sur l’adhésion des citoyens aux principes démocratiques ; le respect des droits civils et politiques ; la confiance envers les institutions et la classe politique ; le « besoin d’Etat », notamment des pauvres ; l’ampleur de la petite corruption ; l'efficience des institutions ; la fiabilité des enquêtes-experts sur la gouvernance ; l’appréciation des politiques de décentralisation au niveau local ; le niveau et la dynamique de la participation sociale et politique, etc. Le bilan concluant qui en est tiré ouvre des perspectives pour les systèmes nationaux d’informations statistiques dans les PED. La mesure et le suivi de cette nouvelle batterie d’indicateurs objectifs et subjectifs au service de la conduite des politiques publiques mériteraient d’être systématisés. |
| Keywords: | Africa, Latin America, Democracy, Monitoring Mechanism, Household Surveys,Governance, Poverty, Corruption, Development Policy, Statistics, Afrique, Amérique latine, Démocratie, Dispositif de suivi, Enquêtes auprès des Ménages, Gouvernance, Pauvreté, Corruption, Politique de développement, Statistique. |
| JEL: | I31 I32 I38 H11 D73 O54 O55 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt200512&r=soc |
| By: | Arup Daripa (School of Economics, Mathematics & Statistics, Birkbeck College) |
| Abstract: | If entrepreneurs have private information about factors influencing the outcome of an investment, individual lending is inefficient. The literature emphasizes improvements through non-market organizations that harness local information through peer monitoring. I investigate the complementary question of designing a credit mechanism when local information is limited, disabling peer monitoring. I show that a pooling mechanism that does not rely on peer monitoring can implement a market for rights-to-borrow, restoring efficiency. The mechanism achieves a strict Pareto improvement - providing incentive for each type of agent to join. Further, even though the mechanism involves pooling - and consequent implicit transfers from better types to worse types - it has a “collective” feature that makes it immune to the Rothschild-Stiglitz cream-skimming problem under competing contracts. Finally, the presence of even weak local information implies that the mechanism cannot be successfully used by formal lenders. Thus a local credit institution can emerge as an optimal response to the informational environment even without peer monitoring. I apply the results to contracts offered by rural moneylenders in developing countries. |
| Keywords: | Informal Credit, Market for Rights-To-Borrow, Participation Incentives, Competition in Contracts and Cream Skimming, Local Information, Rural Moneylending |
| JEL: | O12 D78 D82 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:0519&r=soc |
| By: | Lance Lochner |
| Keywords: | crime, beliefs, deterrence, perceptions |
| JEL: | K4 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:452&r=soc |
| By: | Florence Goffette-Nagot (GATE CNRS); Claire Dujardin |
| Abstract: | This paper is aimed to examine how individual unemployment is influenced both by location in a deprived neighborhood and public housing. Our identification strategy is twofold. First, because we estimate a simultaneous probit model of public housing accommodation, type of neighborhood, and unemployment, the formal identification of the model relies on non-linearities. Second, we take advantage of the location of the public housing sector in France, which allows us to use public housing accommodation as a powerful determinant of neighborhood choices. Our results show that public housing does not have any direct effect on unemployment. However, living within the 35% more deprived neighborhoods does increase the unemployment probability significantly. As expected, the effect of neighborhood substantially decreases when dealing with the endogeneity of neighborhood and when using public housing as a determinant of neighborhood choice. |
| Keywords: | Neighborhood effects, Public housing, Unemployment, Simultaneous probit models, Simulated maximum likehood |
| JEL: | J64 R2 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:0505&r=soc |
| By: | Marco Francesconi (University of Essex and IZA Bonn); Stephen P. Jenkins (ISER, University of Essex, DIW Berlin and IZA Bonn); Thomas Siedler (ISER, University of Essex, DIW Berlin and IZA Bonn) |
| Abstract: | We analyze the impact on schooling outcomes of growing up in a family headed by a single mother. Growing up in a non-intact family in Germany is associated with worse outcomes in models that do not control for possible correlations between common unobserved determinants of family structure and educational performance. But once endogeneity is accounted for, whether by using sibling-difference estimators or two types of instrumental variable estimator, the evidence that family structure affects schooling outcomes is much less conclusive. Although almost all the point estimates indicate that non-intactness has an adverse effect on schooling outcomes, confidence intervals are large and span zero. |
| Keywords: | childhood family structure, lone parenthood, educational success, sibling differences, instrumental variables, treatment effects |
| JEL: | C23 D13 I21 J12 J13 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1837&r=soc |
| By: | Avi Simhon (Agricultural Economics and Management The Hebrew University of Jerusalem); Eric D. Gould; Omer Moav |
| Keywords: | Marriage, Monogamy, Polygyny, Human Capital, |
| JEL: | J12 J24 O10 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:370&r=soc |
| By: | Helmut Rainer (University of St. Andrews); Thomas Siedler (ISER, University of Essex, DIW Berlin and IZA Bonn) |
| Abstract: | In most industrialized countries, more people than ever are having to cope with the burden of caring for elderly parents. This paper formulates a model to explain how parental care responsibilities and family structure interact in affecting children’s mobility characteristics. A key insight we obtain is that the mobility of young adults crucially depends on the presence of a sibling. Our explanation is mainly, but not exclusively, based on a sibling power effect. Siblings compete in location and employment decisions so as to direct parental care decisions at later stages towards their preferred outcome. Only children are not exposed to this kind of competition. This causes an equilibrium in which siblings not only exhibit higher mobility than only children, but also have better labor market outcomes. Using data from the German Socio-Economic Panel Study (SOEP) and from the American National Survey of Families and Households (NSFH), we find strong evidence that confirms these patterns. The implications of our results are then discussed in the context of current population trends in Europe and the United States. |
| Keywords: | geographic mobility, intergenerational relationships, care of the elderly, family bargaining |
| JEL: | D19 J14 C13 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1842&r=soc |
| By: | Tullberg, Jan (Handelshögskolan i Stockholm) |
| Abstract: | Utgångspunkten för artikeln är en analys av reciprocitetens etiska och psykologiska kärna. Därefter diskuteras denna princips betydelse och utveckling i det moderna samhället. Marknadens utbyte är ur etiskt synpunkt att se som en form av reciprocitet; den sker simultant istället för i sekvens. En del marknadstransaktioner är personliga och momentana, men det förekommer också en hel del av den lojalitet och kontinuitet som förknippas med sekventiell reciprocitet. Detta indikeras av att företag ofta tillskrivs goodwillvärden. I staten har reciprocitet traditionellt hyllats som princip, men respekteras till lägre grad i praktiken. Den moderna staten introducerar två förändringar. Den framväxande paternalismen i välfärdsstaten är en utmaning mot liberal individualism, men inte nödvändigtvis mot reciprocitet. Ett centralt moraliskt skifte sker dock med en omfördelningsideologi där ¹distributiv rättvisa¹ blir något som är avskilt från personens bidrag. Det band mellan plikt och rättighet som förespråkades också av socialister försvagas nu och ersätts av en behovsprincip. Detta är en utveckling som det är motiverat att uppmärksamma och ifrågasätta. |
| Keywords: | reciprocitet; utbyte; omfördelning; paternalism |
| JEL: | H24 H42 I38 M14 P16 |
| Date: | 2005–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0072&r=soc |
| By: | MASSIMO CONTE (UNIVERSITY OF MOLISE-DEPT. OF HUMANITIES, HISTORICAL AND SOCIAL SCIENCES) |
| Abstract: | THE DEVELOPMENT SOCIAL RELATIONSHIP IN OUR TIMES IMPOSE A GROWING IMPORTANCE TO 'TRUST' AS A RESOURCE BETWEEN PERSONAL RELATIONSHIP AS BETWEEN PERSONS AND COMPLEX SOCIAL SYSTEM. THE MAIN FEATURE OF MODERNITY IN SOCIAL CONNECTIONS IS GIVEN BY THE SPREAD OF A 'TIME/SPACE' DISTANCE. THE INCREASING DIFFICULTIES OF RELATIONS BETWEEN PERSONS AND ENVIRONMENT FIX OUR CONSTANT NEED TO RECONSIDER OUR ACTIONS/DECISIONS WITH RISK AND TROUBLES, SO 'TRUSTING' IS GOING TO HAVE AN IMPORTANT ROLE AS REDUCING OF SOCIAL COMPLEXITY IN OUR NEAPOLITAN REALITY, WE ASSUME THAT IS BETTER TO 'RELIANCE' RATHER THAN TO TRUST. FOR THE REASON THAT WE DON'T HAVBE A GOOD REPRESENTATIONS OF OTHERS. SO, WE BUILD OUR PERSONAL CONNECTION WITH 'HOPE' AND 'FAITH' BECAUSE WE WONT TO DEFENCE OURSELVES FROM A SOCIAL ENVIRONMENT FELT LIKE DANGEROUS, THEREFORE WE NEED TO HAVE AN EXTERNAL AUTHORITY RATHER THAN TAKE CHANGE OF 'TRUSTING', BECAUSE WE BELIEVE THAT THE ACT OF TRUSTING IS AN ENGAGE/DEPENDENCE ON SOMEONE AND WE WONT TO AVOID THE RISK OF BEING DECEIVED. THESE SOCIAL INTERACTIONS ARE PRECONDITIONS THAT HAVE MANY CONSEQUENCES TO THE ECONOMIC ACTION AND FOR COOPERATION. |
| Keywords: | TRUST, SOCIAL CAPITAL, RISK, RELIANCE, COOPERATION, CONFIDENCE, UNCERTAINTY |
| Date: | 2005–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpri:0511001&r=soc |
| By: | Achyles Barcelos da Costa; Beatriz Morem da Costa |
| Abstract: | Clusters have their economic performance based in the form of its industrial organization and in the existence of institutions and social relationships in its interior. The established connections in the agglomerate are constituted of a kind of asset - social capital - and that it produces economics gains, besides those obtained from the division of labor. However the concepts of industrial districts and of social capital still lack larger precision, as well as it have been varying the dimensions and the social unit to which the concept of social capital is applied. Explicit the conceptual controversy is an important task to organize study of co-operation in local productive arrangements and, also, in the identification of the factors that are in the base of the different co-operation levels found among enterprises belonging to these productive arrangements. |
| JEL: | L16 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2005:113&r=soc |