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on Evolutionary Economics |
| By: | Samuel Bazzi; Martin Fiszbein; Mesay Gebresilasse |
| Abstract: | In a classic 1893 essay, Frederick Jackson Turner argued that the American frontier promoted individualism. We revisit the Frontier Thesis and examine its relevance at the subnational level. Using Census data and GIS techniques, we track the frontier throughout the 1790-1890 period and construct a novel, county-level measure of historical frontier experience. We document skewed sex ratios and other distinctive demographics of frontier locations, as well as their greater individualism (proxied by infrequent children names). Many decades after the closing of the frontier, counties with longer historical frontier experience exhibit more prevalent individualism and opposition to redistribution and regulation. We take several steps towards a causal interpretation, including an instrumental variables approach that exploits variation in the speed of westward expansion induced by national immigration inflows. Using linked historical Census data, we identify mechanisms giving rise to a persistent frontier culture. Selective migration contributed to greater individualism, and frontier conditions may have further shaped behavior and values. We provide evidence suggesting that rugged individualism may be rooted in its adaptive advantage on the frontier and the opportunities for upward mobility through effort. |
| JEL: | D72 H2 N31 N91 P16 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23997&r=evo |
| By: | Roland Hodler; Michele Valsecchi; Alberto Vesperoni |
| Abstract: | The effects of ethnic geography, i.e., the distribution of ethnic groups across space, on economic, political and social outcomes are not well understood. We develop a novel index of ethnic segregation that takes both ethnic and spatial distances between individuals into account. Importantly, we can decompose this index into indices of spatial dispersion, generalized ethnic fractionalization, and the alignment of spatial and ethnic distances. We use maps of traditional ethnic homelands, historical population density data, and language trees to compute these four indices for more than 150 countries. We apply these indices to study the relation between historical ethnic geography and current economic, political and social outcomes. Among other things, we document that countries with higher historical alignment, i.e., countries where ethnically diverse individuals lived far apart, have higher-quality government, higher incomes and higher levels of trust. |
| Keywords: | ethnic diversity, ethnic geography, segregation, fractionalization, quality of government, economic development, trust |
| JEL: | C43 D63 O10 Z13 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6720&r=evo |
| By: | Siedlarek, Jan-Peter (Federal Reserve Bank of Cleveland); Panebianco , Fabrizio (Bocconi University and IGIER); Prummer, Anja (School of Economics and Finance, Queen Mary University of London) |
| Abstract: | We highlight that convergence in repeated averaging models commonly used to study cultural traits or opinion dynamics is not equivalent to convergence in Markov chain settings if transition matrices are time-varying. We then establish a new proof for the convergence of cultural traits in the model of Panebianco (2014) correcting the existing proof. The new proof provides novel insights on the long-run outcomes for inessential individuals. We close with a discussion of conditions for convergence in repeated averaging models with time-varying transition matrices. |
| JEL: | D83 D85 Z13 |
| Date: | 2017–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1720&r=evo |
| By: | Montalvo, Jose G; Reynal-Querol, Marta |
| Abstract: | The relationship between ethnic heterogeneity and economic growth is complex. Empirical research working with cross-country data finds a negative, or statistically insigni cant, relationship. However, research at the city level usually fi nds a positive relationship between diversity and wages/productivity. Generally, the trade-off between the economic bene fits of diversity and the costs of heterogeneity implies that the relationship between diversity and growth depends on the size of the area used as the unit of observation. In this paper we perform a systematic analysis of the effect of the size of geographical units on the relationship between ethnic diversity and growth. We fi nd a positive relationship for small geographical areas and no effect for large areas and countries. There are potentially different mechanisms that can explain this result depending on the structure of the economy and its level of development. In the case of Africa, we argue that a possible explanation of the positive relationship between diversity and growth is the increase in trade at the boundaries between ethnic groups due to ethnic specialization. |
| Keywords: | Economic Growth; Ethnicity; Scale |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12400&r=evo |
| By: | Larbi Alaoui; Antonio Penta |
| Abstract: | Recent experiments suggest that level-k behavior is often driven by subjects' beliefs, rather than their binding cognitive bounds. But the extent to which this is true in general is not completely understood, mainly because disentangling 'cognitive' and 'behavioral' levels is challenging experimentally and theoretically. In this paper we provide a simple experimental design strategy (the 'tutorial method') to disentangle the two concepts purely based on subjects' choices. We also provide a 'replacement method' to assess whether the increased sophistication observed when stakes are higher is due to an increase in subjects' own understanding or their beliefs over others' increased incentives to reason. We find evidence that, in some of our treatments, the cognitive bound is indeed binding for a large fraction of subjects. Furthermore, a significant fraction of subjects do take into account others' incentives to reason. Our findings also suggest that in general, level-k behavior should not be taken as driven either by cognitive limits alone or beliefs alone. Rather, there is an interaction between own cognitive bound and reasoning about the opponent's reasoning process. From a methodological viewpoint, the tutorial and replacement methods have broader applicability, and can be used to study the beliefs-cognition dichotomy and higher order beliefs e ects in non level-k settings as well. |
| Keywords: | cognitive bound, depth of reasoning, higher-order beliefs. level-k reasoning, replacement method, tutorial method |
| JEL: | C72 C92 D80 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1587&r=evo |