nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2007‒08‒18
fifteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Did the Decline in Social Capital Decrease American Happiness? A Relational Explanation of the Happiness Paradox By Stefano Bartolini; Ennio Bilancini; Maurizio Pugno
  2. Are Gangs an Alternative to Legitimate Employment? Investigating the Impact of Labor Market Effects on Gang Affiliation. By R. Alan Seals
  3. Can a rise in income inequality improve welfare? By Pérez Truglia, Ricardo Nicolás
  4. Social Capital And Relative Income Concerns: Evidence From 26 Countries By Justina Fischer; Benno Thorgler
  5. Remittances as insurance for idiosyncratic and covariate shocks in Malawi: The importance of distance and relationship By Davies, Simon
  6. Social Networks in The Boardroom By Francis Kramarz; David Thesmar
  7. Self-enforcing Norms and the Efficient Non-cooperative Organization of Clans By Kai A. Konrad; Wolfgang Leininger
  8. The network structure of informal arrangements : evidence from rural Tanzania By COMOLA Margherita
  9. The patterns and causes of social exclusion in Luxembourg By Raileanu Szeles, Monica
  10. « If you love me, follow me. » Sibling's migration in France, 1870-1940 By KESZTENBAUM Lionel
  11. The Economics of Corporate Social Responsibility (CSR): Selling to Someone who Has Personal Valuation By Martin Daniel Siyaranamual
  12. Economic Determinants of Participation in Physical Activity and Sport By Brad R. Humphreys; Jane E. Ruseski
  13. A gender-neutral approach to gender issues. By Alessandro Cigno
  14. Ordinal vs Cardinal Status: Two Experiments By Ennio Bilancini; Leonardo Boncinelli
  15. The pronouncements of paranoid politicians By Guido, Cataife

  1. By: Stefano Bartolini; Ennio Bilancini; Maurizio Pugno
    Abstract: Most popular explanations of the happiness paradox cannot fully account for the lack of growth in U.S. reported well-being during the last thirty years (Blanchflower and Oswald (2004)). In this paper we test an alternative hypothesis, namely that the decline in U.S. social capital is responsible for what is left unexplained by previous research. We provide three main findings. First, we show that the inclusion of social capital does improve the account of reported happiness. Second, we provide evidence of a decline in social capital indicators for the period 1975-2004, confirming Putnam's claim (Putnam (2000)). Finally, we show that failed growth of happiness is largely due to the decline of social capital and, in particular, to the decline of its relational and intrinsically motivated component.
    Keywords: happiness, social capital, economic growth, relational goods, instrinsic motivations
    JEL: I3 O1
    Date: 2007–08
  2. By: R. Alan Seals
    Abstract: This paper adds to the literature estimates of local labor market effects on gang participation. I use data from the 1997 cohort of the National Longitudinal Survey of Youth (NLSY97) to model the probability of gang involvement. The effect of the local unemployment rate is statistically significant and positive, across a wide-range of model specifications. However, robustness checks reveal gang participation of individuals less than sixteen years-of-age (the legal minimum age for most jobs) is not responsive to the local unemployment rate. Gang participation among individuals with lower ASVAB scores is more sensitive to the local unemployment rate.
    Keywords: gang participation, NLSY, intelligence, unemployment
    JEL: J00 J19
    Date: 2007–08
  3. By: Pérez Truglia, Ricardo Nicolás
    Abstract: Since status goods are thought not to derive intrinsic utility, the common vision among economists insists that relative concerns make everyone unhappy. Using a signaling-type model, I claim that conspicuous consumption is a natural and efficient response of people to the absence of certain markets. Then I test my conjecture based on panel data for 10,000 respondents in Russia for 2000-2002, exploiting two identification strategies. The following results emerge: i. Regional expenditures inequality does increase the marginal utility derived from consumption; ii. Consumption has an indirect effect on happiness; iii. The presence of status goods can explain a utility function initially concave and then convex, and hence it would be efficient to spread the income of the middle-class; iv. The results remain unchanged after controlling for a wide range of recent theories, such as comparison happiness, happiness dynamics and income equivalence scale elasticity.
    Keywords: Happiness; income; life satisfaction; conspicuous consumption; inequality; welfare.
    JEL: D61 D31 C33
    Date: 2007–01–29
  4. By: Justina Fischer; Benno Thorgler
    Abstract: Research evidence on the impact of relative income position on individuals’ attitudes and behaviour is sorely lacking. Therefore, using the International Social Survey Programme 1998 data from 26 countries this paper investigates the impact of relative income on 14 measurements of social capital. We find support for a considerable deleterious positional concern effect of persons below the reference income. This effect is more sizeable by far than the beneficial impact of a relative income advantage. Most of the results indicate that such an effect is non-linear. Lastly, changing the reference group (regional versus national) produces no significant differences in the results.
    Keywords: Relative income, positional concerns, social capital, social norms, happiness.
    JEL: Z13 I30 D31
  5. By: Davies, Simon
    Abstract: This paper uses Malawian panel data to show the importance of geography and family relationships when studying remittances. We do not test any hypothesis as such, but instead demonstrate the significance of the source of remittances in testing hypotheses. When remittances are viewed from an insurance perspective, geography matters. Covariate (community) shocks tend to be insured further from home than idiosyncratic ones. When viewed from a motivational perspective, family relationship and culture matter. Furthermore, gift exchange amongst unrelated households can be as important as remittance flows amongst members of the same family in insuring shocks. Inter-household remittances are closely linked to social networks, with business and religious groups being particularly important (perhaps due to trust). Remittance flows are often reciprocal – receiving households often being the main senders, emphasizing their insurance nature.
    Keywords: Remittances; Insurance; Household Economics; Malawi; Africa
    JEL: O18 D19 D31
    Date: 2007–07
  6. By: Francis Kramarz; David Thesmar
    Abstract: This paper provides empirical evidence consistent with the facts that (1) social networks may strongly affect board composition and (2) social networks may be detrimental to corporate governance. Our empirical investigation relies on a large dataset on executives and outside directors of corporations listed on the Paris stock exchange over the 1992-2003 period. This data source is a matched employer employee dataset providing both detailed information on directors/CEOs and information on the firm employing them. We first find a very strong and robust correlation between the CEO’s network and that of his directors. Networks of former high ranking civil servants are the most active in shaping board composition. Our identification strategy takes into account (1) firm and directors’ fixed effects and (2) matching of firms and director along one observable and one unobservable characteristic. We then turn to real effects of such network activity. We find that firms where these networks are most active are less likely to change CEO when they underperform. This suggests that social networks in the board room impair corporate governance.
    Date: 2006–11
  7. By: Kai A. Konrad; Wolfgang Leininger
    Abstract: We study how norms can solve distributional conflict inside a clan and the efficient coordination of collective action in a conflict with an external enemy.We characterize a fully non-cooperative equilibrium in a finite game in which a self-enforcing norm coordinates the members on efficient collective action and on a peaceful distribution of the returns of collective action.
    Keywords: Free-riding, defence, collective action, distributional conflict, war, norms
    JEL: D72 D74 H41
    Date: 2007–06
  8. By: COMOLA Margherita
    Abstract: In developing countries, whenever formal economic and financial institutions lack strength, households are forced to rely on risk sharing and other informal arrangements based on pre-existing interpersonal relationships. This paper takes a network perspective to investigate how rural households form the links through which they provide and/or get economic support, and whether the connection structure of the community affects the formation of these links. I test the hypothesis that indirect contacts matter, that is, agents take into account not only potential partners’ characteristics, but also their position with respect to all other agents. A network formation framework with fully heterogeneous agents is first presented, following Jackson and Wolinsky (1996), an estimation procedure is then proposed and applied to data on a village in rural Tanzania. Results show that when agents evaluate the net advantage of forming a link they also consider the relative position and the wealth of indirect partners. My paper contributes to both network theory and the literature on risk sharing arrangements in that it proposes an innovative procedure to estimate endogenous network formation models, and provides evidence that network structure has an explanatory value disregarded by all previous studies, which are focused on direct relations only.
    Keywords: households, risk sharing arrangements, network structure, Tanzania.
    JEL: O15
    Date: 2007–05
  9. By: Raileanu Szeles, Monica (Transylvania University of Brasov, CEPS/ INSTEAD Luxembourg)
    Abstract: The paper investigates the forms and determinants of social exclusion in Luxembourg and addresses both conceptual and empirical issues. We therefore examine the following issues: what definition of social exclusion is more appropriate for Luxembourg, if the economic and social disadvantages cumulate within the social exclusion process in Luxembourg, if the “spiral of precariousness” applies for Luxembourg, how poverty and deprivation lead to social exclusion, which are the main determinants of social exclusion and deprivation and if there are significant differences between them. The analysis is based on the data coming from the Luxembourg socioeconomic panel (PSELL-2).
    Keywords: social exclusion; deprivation ; cumulative disadvantage
    JEL: I32
    Date: 2007–08
  10. By: KESZTENBAUM Lionel
    Abstract: Recent works emphasize the role of the family in migration decisions. They particularly insist on the specific schedule of mobility that depends not only on individual life-cycle but also on the situation of the whole family at a given time. French military registers provide us with very detailed information on migrations, scarcely available in other sources. . We consider the smallest family group, male siblings, and focus on their life-cycle migration behaviours. We start by testing the simplest family indicator, birth rank and we show that, by itself, it has no effect on migration decisions. Mobility is not constrained by the order of birth among brothers. We then study whether or not there is competition among siblings and, in particular, if the migration of one of them encourages or prevents mobility of the others. Comparing the chances for an individual to move before and after the migration of his brother, we show that brother mobility did have a positive influence on someone's own mobility. But this result holds only for short distance migration. In other words, the short distance migration decision of an individual is heavily influenced by his brother's own short distance migration. Therefore, we argue that this kind of mobility is a collective decision that depends on family strategies whereas long distance migration, which is much more costly, is constrained and heavily dependant on individual characteristics such as his occupation before mobility. This approachs heds new light on the migration process and insists on its family component.
    Keywords: migration, family strategy, social network.
    JEL: N3 O15
    Date: 2007–06
  11. By: Martin Daniel Siyaranamual (Department of Economics, Padjadjaran University)
    Abstract: This paper provides general insight on the economic feasibility and desirability of Corporate Social Responsibility (CSR), in order to explain why some firms voluntarily over comply with social matters. In this paper I define CSR as the activity in which firms makes an explicit pair between the sales of private good and the provision of public good. Furthermore, the consumers are divided into two different categories; responsible consumers and non responsible ones. The main result shows that CSR activity could be considered as a firm's strategy to internalize the externality, and thus it would not be contradicted with profit maximization. Moreover, could be an alternative way for the provision of public good, especially in the presence of government failure.
    Keywords: Corporate social responsibility, public goods
    JEL: L15 L21 M14
    Date: 2007–06
  12. By: Brad R. Humphreys (Department of Recreation, Sport and Tourism, University of Illinois); Jane E. Ruseski (Department of Kinesiology and Community Health, University of Illinois)
    Abstract: This paper examines the economic determinants of participation in physical activity by developing and analyzing a consumer choice model of participation and by testing the predictions of this model using data drawn from the Behavioral Risk Factor Surveillance Survey (BRFSS). Both emphasize that individuals face two distinct decisions: (1) should I participate in sport?; and (2) how much time should I spend participating in sport? The evidence highlights the importance of selectivity. The economic factors that affect these two decisions work in opposite directions; factors that increase the likelihood of participation generally decrease the amount of time spent participating.
    Keywords: physical activity, time allocation, health production
    JEL: I20 I12 I18 L83
    Date: 2006–07
  13. By: Alessandro Cigno
    Abstract: In this paper, I attempt to explain a number of facts, adverse to women, without assuming that the latter are discriminated against in the labour market, that mothers love children more fathers, or that parents treat sons better than daughters. Nor do I assume that individual behaviour is subject to any sort of social conditioning in particular, that women feel compelled to stay at home and look after their children just because they are women. I do this not because I believe it to be necessarily true in all circumstances, but in order to show that none of those assumptions is necessary to explain why, for example, girls might receive less education than boys, and women might participate in the labour market less than men or get less than their fair share of household consumption. I also provide a rationale for the institution of the dowry, and point out a possible link between compulsory education and non-cooperative marriages.
    Keywords: domestic division of labour, child care, bargaining with endogenous threat point, non cooperation, dowries, education, irreversibility
    JEL: D13 J12 J13 J24
    Date: 2006–10
  14. By: Ennio Bilancini; Leonardo Boncinelli
    Abstract: We demonstrate that in models where agents have concerns for status the model predictions can drastically change depending on whether status is modelled as an ordinal or cardinal magnitude. As a proof, we show that two well known theoretical findings are not robust to the substitution of ordinal status with cardinal status (Frank (1985)) and viceversa (Clark and Oswald (1998)).
    Keywords: Status, Social Comparison, Ordinality, Cardinality
    JEL: D0
    Date: 2007–08
  15. By: Guido, Cataife
    Abstract: This paper models the strategic encounter of two office-motivated candidates who may or may not announce policy. In the case of no announcement, the voters rank the candidates according to prior beliefs. In the case of announcement, the candidates cannot avoid a degree of noise in the voters' interpretation of their announcements. We show that this simple deviation from the standard Downsian setting suffices to overcome previous impossibility results which suggest that not announcing policy can never occur in equilibrium. Also, we extend the model to study the equilibrium when candidates are ambiguity averse. An ambiguity averse candidate is interpreted as being concerned about an ongoing negative campaign against him. This negative campaign would consist in inducing the voters to adopt some interpretation of the candidate's announcement unfavorable to his electoral performance. We show that under ambiguity aversion the candidates opt not to announce position under less stringent conditions than expected utility. Finally, we use data on U.S. Senate elections to test an empirical implication of the model. We find that the relevant coefficient has the sign predicted by the theory and is statistically significant.
    Keywords: Voting; Salience; Electoral Ambiguity; Ambiguity Aversion; Media Politics
    JEL: D72 C13 C72
    Date: 2007–08–10

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