nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2005‒09‒11
twelve papers chosen by
Fabio Sabatini
Universitá degli Studi di Roma, La Sapienza

  1. The Long and Winding Road: Social Capital and Commuting By Poulsen, Odile; Svendsen, Gert Tinggaard
  2. Love Thy Neighbor: Bonding versus Bridging Trust By Poulsen, Odile; Svendsen, Gert Tinggaard
  3. Experimental Analysis of Neighborhood Effects By Jeffrey R. Kling; Jeffrey B. Liebman; Lawrence F. Katz
  4. Social Networks in Labor Markets By Antoni Calvo-Armengol; Yannis M. Ioannides
  5. Random Graphs and Social Networks: An Economics Perspective By Yannis M. Ioannides
  6. Insuring Consumption and Happiness Through Religious Organizations By Rajeev Dehejia; Thomas DeLeire; Erzo F.P. Luttmer
  7. Beliefs and trust : an experiment By Vyrastekova,Jana; Garikipati,Supriya
  8. Bridging the Barriers: Knowledge Connections, Productivity, and Capital Accumulation By R. Quentin Grafton; Tom Kompas; P. Dorian Owen
  9. Local Factors and Innovativeness – An Empirical Analysis of German Patents for Five Industries By T. Broekel; T. Brenner
  10. Contests, NGOs and Decentralizing Aid By Gil S. Epstein; Ira N. Gang
  11. Language Minorities in Europe: Dying species or forerunner of a transnational civil society? By Hans-Jörg Trenz
  12. What Buys Happiness? Analyzing Trends in Subjective Well-Being in 15 European Countries, 1973-2002 By Christian Bjørnskov; Nabanita Datta Gupta; Peder J. Pedersen

  1. By: Poulsen, Odile (Department of Economics, Aarhus School of Business); Svendsen, Gert Tinggaard (Aarhus University, Department of Public Policy)
    Abstract: We develop a two-sector model to analyze which kind of social <p> organization generates trust. Social capital is de…ned as trust. We examine two <p> communities: the bedroom community in which people commute long distance <p> to work and the virility community in which people do not commute to work. <p> The hypothesis is that people do not have time to interact spontaneously out- <p> side work in the bedroom community. We show that in the bedroom community <p> social capital cannot accumulate. Hence our results show that time spent in- <p> teracting with your neighbor must be added as an important production factor <p> when considering the formation of social capital in society. Thus, in a commu- <p> nity where agents only interact when producing output, social capital may not <p> accumulate To our knowledge, no such attempt to model social capital has yet <p> been undertaken and this gap or ‘missing link’in economic debates has to be <p> developed to grasp a more holistic understanding of the big di¤erences in the <p> wealth of nations or regions
    Keywords: Social capital; Two-Sector Model; Indeterminacy
    JEL: A12 C61 D90 O41
    Date: 2005–09–02
  2. By: Poulsen, Odile (Department of Economics, Aarhus School of Business); Svendsen, Gert Tinggaard (Aarhus University, Institut for Public Policy)
    Abstract: We study how trust is generated in society. In a two-sector <p> model, we analyze two communities. In the bonding community people do not <p> trust people outside their regular networks. In the bridging community people <p> choose to trust strangers when they meet them. The hypothesis is that when <p> trust is only bonding, it cannot accumulate. Our theoretical contribution is to <p> show that when trust is only bonding then the economy’s level of trust moves <p> to an unstable equilibrium that may under certain conditions ‡uctuate forever. <p> If, however, trust is also bridging, then trust will accumulate. Future research <p> should seek to establish the appropriate institutional framework for establishing <p> the optimal mix between both bonding and bridging social capital in society.
    Keywords: Trust; two-sector model; chaos
    JEL: A12 C61 D90 O41
    Date: 2005–09–02
  3. By: Jeffrey R. Kling; Jeffrey B. Liebman; Lawrence F. Katz
    Abstract: Families, primarily female-headed minority households with children, living in high-poverty public housing projects in five U.S. cities were offered housing vouchers by lottery in the Moving to Opportunity program. Four to seven years after random assignment, families offered vouchers lived in safer neighborhoods that had lower poverty rates than those of the control group not offered vouchers. We find no significant overall effects of this intervention on adult economic self-sufficiency or physical health. Mental health benefits of the voucher offers for adults and for female youth were substantial. Beneficial effects for female youth on education, risky behavior, and physical health were offset by adverse effects for male youth. For outcomes exhibiting significant treatment effects, we find, using variation in treatment intensity across voucher types and cities, that the relationship between neighborhood poverty rate and outcomes is approximately linear.
    JEL: H43 I18 I38 J38
    Date: 2005–08
  4. By: Antoni Calvo-Armengol; Yannis M. Ioannides
    Abstract: Research in sociology and economics point to important role for social networks in labor markets. Social contacts mediate propagation of rich and reliable information among indi- viduals and thus help workers find jobs and employers find employees. Recent theoretical advances show that for agents connected through networks employment is positively cor- related across time and agents, unemployment exhibits duration dependence, and inequal- ity can persist. Recent empirical findings underscore nonlinearities in social interactions and potentially important effects of self-selection. Socioeconomic characteristics can explain substantial spatial dependence in unemployment.
    Keywords: networks, labor markets, social connections, unemployment, proximity, spatial dependence, information networks, neighborhoods and jobs
    JEL: D85 A14 J64 J31 J70 L14
    Date: 2005
  5. By: Yannis M. Ioannides
    Abstract: This review of current research on networks emphasizes three strands of the literature on social networks. The first strand is composed of models of endogenous network formation from both the economics and the computer science literature. The review highlights the sen- sitive dependence of the topology of endogenous networks on parameters of the behavioral models employed. The second strand draws from the recent econophysics literature in order to review the recent revival of interest in the random graph theory. This mathematical tool allows one to study social networks that result from uncoordinated random action of indi- viduals in setting up connections with others. The review explores a number of examples to assess the potential of recent research on random graphs with arbitrary degree distributions in accommodating more general behavioral motivations for social network formation. The third strand focuses on a specific model of social networks, Markov random graphs, that is quite central in the mathematical sociology and spatial statistics literatures but little known outside those literatures. These are random graphs where the events that different edges are present are dependent, if edges are incident to the same node, and independent, otherwise. The paper assesses the potential for economic applications with this particular tool. The paper concludes with an assessment of observable consequences of optimizing behavior in networks for the purpose of estimation.
    Date: 2005
  6. By: Rajeev Dehejia; Thomas DeLeire; Erzo F.P. Luttmer
    Abstract: This paper examines whether involvement with religious organizations insures an individual's stream of consumption and of happiness. Using data from the Consumer Expenditure Survey (CEX), we examine whether households who contribute to a religious organization are able to insure their consumption stream against income shocks and find strong insurance effects for whites. Using the National Survey of Families and Households (NSFH), we examine whether individuals who attend religious services are able to insure their stream of happiness against income shocks and find strong happiness insurance effects for blacks but smaller effects for whites. Overall, our results are consistent with the view that religion provides an alternative form of insurance for both whites and blacks though the mechanism by which religious organizations provide insurance to each of these groups appears to be different.
    JEL: D12 H31 J60 Z12
    Date: 2005–08
  7. By: Vyrastekova,Jana; Garikipati,Supriya (Tilburg University, Center for Economic Research)
    Abstract: In this paper, we address the concept of trust by combining (i) the self-reported trust and belief in trustworthiness of others from a general unpaid questionnaire, (ii) choices made in a social valuation task designed to measure subjects' distributional preferences, (iii) strategies submitted in the trust game in both roles of the game, and (iv) subjects' beliefs about the strategies of their co-player submitted in the form of probability distributions nad incentivized by the quadratic scoring rule. We show that trust can be expressed as a belief in positive reciprocity of the trustee, and answers to general questionnaire lack predictive power. Distributional preferences also play a role in the decision to trust in that they affect the subjects' beliefs about the positive reciprocity of others. Cooperative subjects are more optimistic in their beliefs and therefore trust more.
    Keywords: experimental economics;trust;beliefs;distributional preferences
    JEL: C72 C91
    Date: 2005
  8. By: R. Quentin Grafton (Asia Pacific School of Economics and Government, The Australian National University); Tom Kompas (Asia Pacific School of Economics and Government, The Australian National University); P. Dorian Owen (Asia Pacific School of Economics and Government, The Australian National UniversityTitle:)
    Abstract: The paper explains the large differences in cross-country productivity performance by modeling and testing the effects of social barriers to communication on productivity and capital accumulation. In an optimal growth model, social barriers to communication that impede the formation of knowledge connections are shown to reduce both transitory and steady-state levels of total factor productivity (TFP), per capita consumption, and reproducible capital. A ‘bridging’ parameter in the growth model that lowers the disutility of forming knowledge connections generates testable and dynamic implications about the effects of social barriers on capital, consumption, and productivity. Extensive empirical testing of the theoretical propositions yields a robust and theoretically consistent result — linguistic barriers to communication reduce productivity and capital accumulation. The findings provide a theoretical justification and a robust explanation for cross-country differences in TFP, and fresh insights into how productivity ‘catch up’ may be initiated.
    Keywords: knowledge connections, productivity, economic growth
    JEL: O41 C61 C21
    Date: 2004–11
  9. By: T. Broekel; T. Brenner
    Abstract: A growing body of work emphasizes the role that the spatial component plays in the in the innovation process. These perspectives brought the region's infrastructure and its endowment with crucial factors into the focus of research. Given that these factors do significantly influence the innovativeness of local firms, it is important to identify precisely which regional characteristics matter. The aim of this paper is to identify a number of key influences out of a multitude of structural factors that are thought to influence the firm's innovation activity. We examine more than eighty variables that approximate the financial, geographical and social-economic factor endowment of a region. The variables are tested with a linear and log - linear model. The two staged procedure examines the variable's bivariate correlation with patent data of five industries. Based on these outcomes multivariate regression models are applied in the second stage. The results for the different models are compared and their advantages and disadvantages are discussed. We find a strong impact of economic agglomeration, extramural science institutions and human capital. In the case of human capital, especially the graduates at the technical colleges are collocated with high regional innovativeness. Furthermore, significant differences are observed for the five industries and for using the two models.
    Date: 2005–08
  10. By: Gil S. Epstein (Bar-Ilan University and IZA Bonn); Ira N. Gang (Rutgers University and IZA Bonn)
    Abstract: International donors usually have particular goals they want to achieve with their foreign aid, for example, poverty alleviation. In the international aid story lobbying by potential recipient groups attempting to capture the donor’s support play a potentially important role for nongovernmental organizations. We model this situation as a hierarchical contest and compare the implications of a centralized allocation process with a decentralized allocation process with nongovernmental organizations as intermediaries.
    Keywords: contests, NGOs, aid
    JEL: F35 D72
    Date: 2005–07
  11. By: Hans-Jörg Trenz
    Keywords: identity; minorities; Nation-state; civil society; Germany; France; Spain
    Date: 2005–08–12
  12. By: Christian Bjørnskov (Aarhus School of Business); Nabanita Datta Gupta (Danish National Institute of Social Research and IZA Bonn); Peder J. Pedersen (University of Aarhus, Danish National Institute of Social Research and IZA Bonn)
    Abstract: Trends in life satisfaction are examined across 15 European countries employing a modified version of Kendall’s Tau. Analyses show that GDP growth relative to growth in the preceding period is a significant determinant of the trends; the same holds for the growth in life expectancy while the contemporaneous growth in the current account balance exerts a positive influence. Relative unemployment growth becomes significant when interacted with a measure of the long-run political ideology of the median voter. The effects of relative GDP growth vary with the political ideology variable.
    Keywords: subjective well-being, economic factors
    JEL: I31
    Date: 2005–07

This nep-soc issue is ©2005 by Fabio Sabatini. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.