nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2010‒07‒17
thirteen papers chosen by
Fabio Sabatini
Euricse and University of Trento

  1. The role of social trust in reducing long-term truancy and forming human capital in Japan By Yamamura, Eiji
  2. Poverty status and the impact of social networks on smallholder technology adoption in rural Ethiopia By Liverpool, Lenis Saweda O.; Winter-Nelson, Alex
  3. Divorce decisions, divorce laws and social norms By Victor Hiller; Magali Recoules
  4. Liquidity in Credit Networks: A Little Trust Goes a Long Way By Pranav Dandekar; Ashish Goel; Ramesh Govindan; Ian Post
  5. Do Laws Affect Attitudes? - An assessment of the Norwegian prostitution law using longitudinal data By Jakobsson, Niklas; Kotsadam, Andreas
  6. Are They Watching You and Does It Matter? - Evidence from a Natural Field Experiment By Alpízar, Francisco; Martinsson, Peter
  7. Cultural Leaders and the Clash of Civilizations By Esther Hauk; Hannes Mueller
  8. Altrusim. Education Subsidy and Growth By Armellini, Mauricio; Basu, Parantap
  9. Economic Freedom, Human Rights, and the Returns to Human Capital: An Evaluation of the Schultz Hypothesis By Elizabeth M. King; Claudio E. Montenegro; Peter F. Orazem
  10. The relationship between corruption and public investment at the municipalities’ level in Indonesia By Dartanto, Teguh
  11. Incentives and social preferences By Strassmair, Christina
  12. Peer Effects and the Promise of Social Mobility: A Model of Human Capital Investment By Chris Bidner
  13. On the formation of coalitions to provide public goods: Experimental evidence from the lab By Dannenberg, Astrid; Lange, Andreas; Sturm, Bodo

  1. By: Yamamura, Eiji
    Abstract: This paper attempts to examine how social trust influences human capital formation using prefectural level data in Japan. To this end, I constructed a proxy for social trust, based on the Japanese General Social Surveys. After controlling for socioeconomic factors, I found that social trust plays an important role in reducing the rate of long-term truancy in primary and junior high school. Results suggest that social trust improves educational quality and plays a critical role in human capital formation in developed countries.
    Keywords: human capital; educational economics; economic impact
    JEL: Z13 A21
    Date: 2010–06–30
  2. By: Liverpool, Lenis Saweda O.; Winter-Nelson, Alex
    Abstract: Despite the promise of many new farm technologies, technology adoption rates in Ethiopia remain low. This paper studies the impact of social networks on technology adoption through social learning. In addition to geographic networks, intentional relationships are considered. The differential impacts by network type, technology, and asset poverty status are explored. We find evidence that although social learning occurs, it is more consistent for households not in poverty traps than for those that are persistently asset poor. Social learning among rural households is stronger for more complex technologies and is associated with intentional relationships rather than with geographic networks.
    Keywords: asset poverty, geographic networks, households, Poverty traps, Social networks, Technology adoption,
    Date: 2010
  3. By: Victor Hiller (LEM - Université Paris II Panthéon-Assas); Magali Recoules (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This article focuses on the three way relationship between change in divorce law, evolution of divorce rate and evolution of the cultural acceptance of divorce. We consider a heterogeneous population in which individuals differ in terms of the subjective loss they suffer when divorced, this loss being associated with stigmatizing social norms. The proportion of each type of individual evolves endogenously through a cultural transmission process. Divorce law is chosen by majority voting between two alternatives : mutual consent and unilateral divorce. In this framework, evolutions of divorce rate and divorce law may be jointly affected by the cultural dynamics within the society. In particular, we are able to reproduce the fact that divorce rate often raises before a legislation change. Indeed, the shift from consensual to unilateral divorce has an accelerating effect on the increase in divorce rate but is not the driving force behind this evolution.
    Keywords: Marriage and divorce, divorce legislation, cultural evolution, social norms.
    Date: 2010–04
  4. By: Pranav Dandekar; Ashish Goel; Ramesh Govindan; Ian Post
    Abstract: Credit networks represent a way of modeling trust between entities in a network. Nodes in the network print their own currency and trust each other for a certain amount of each other's currency. This allows the network to serve as a decentralized payment infrastructure---arbitrary payments can be routed through the network by passing IOUs between trusting nodes in their respective currencies---and obviates the need for a common currency. Nodes can repeatedly transact with each other and pay for the transaction using trusted currency. A natural question to ask in this setting is: how long can the network sustain liquidity, i.e.\ how long can the network support the routing of payments before credit dries up? We answer this question in terms of the long term success probability of transactions for various network topologies and credit values. We show that a number of well-known graph families have the remarkable property that repeated transactions do not result in a loss of liquidity. Further, we show using simulations that the success probability of transactions in Erd\"{o}s-R\'{e}nyi and power-law networks depends only on average node degree and credit capacity, not on network size. Finally, we compare liquidity in credit networks to that in a centralized payment infrastructure and show that credit networks are not significantly less liquid; thus we do not lose much liquidity in return for their robustness and decentralized properties.
    Date: 2010–07
  5. By: Jakobsson, Niklas (Department of Economics, School of Business, Economics and Law, Göteborg University); Kotsadam, Andreas (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: The question of whether laws affect attitudes has inspired scholars across many disciplines, but empirical knowledge is sparse. Using longitudinal survey data from Norway and Sweden, collected before and after the implementation of a Norwegian law criminalizing the purchase of sexual services, we assess the short-run effects on attitudes using a difference-in-differences approach. In the general population, the law did not affect moral attitudes toward prostitution. However, in the Norwegian capital, where prostitution was more visible before the reform, the law made people more negative toward buying sex. This supports the claim that proximity and visibility are important factors for the internalization of legal norms.<p>
    Keywords: attitudes; norms; law; prostitution
    JEL: K14 K40
    Date: 2010–07–07
  6. By: Alpízar, Francisco (Environment for Development Program, CATIE); Martinsson, Peter (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: In a natural field experiment, we tested whether being alone or in a group had an effect on prosocial behavior as expressed in donations to a recreational park. We also explored whether the presence of people exogenous to the group at the time of the donation had any behavioral effect. Our first treatment aimed at identifying peer effects, whereas our second treatment was similar to being in the public eye. We found that being in a group significantly increases the share of people acting prosocially. Moreover, we found that only individuals who are part of a group are positively affected by the presence of a third party.<p>
    Keywords: Donation; natural field experiment; prosocial behavior; public disclosure
    JEL: C93 Q28
    Date: 2010–07–07
  7. By: Esther Hauk; Hannes Mueller
    Abstract: This article builds a micro founded model of the clash of cultures. The clash is defined as the parent's fear of a trait change by their child in an overlapping generations model with intergenerational transmission of cultural traits. The extent of the clash is manipulated by cultural leaders who benefit from the cultural education effort by parents. We identify three channels through which the leaders can affect the clash of cultures: (i) by providing beneficial cultural values, (ii) by claims of cultural superiority and (iii) by cultural alienation, i.e. by inducing cultural dislike towards their own group. We show that all three channels can be in the leader's interest but channels (ii) and (iii) reduce the utility of the leader's goup members. This hints to a strong conflict of interest within groups - between the population at large and the benefactors of radicalization. We further show how the use of alienation relates to the economic opportunities available to a group.
    Date: 2010–07–12
  8. By: Armellini, Mauricio; Basu, Parantap
    Abstract: An optimal education subsidy formula is derived using an overlapping generations model with parental altruism. The model predicts that public education subsidy is greater in economies with lesser parental altruism because a benevolent government has to compensate for the shortfall in private education spending of less altruistic parents with a finite life. On the other hand, growth is higher in economies with greater parental altruism. Cross-country regressions using the World Values Survey for altruism lend support to our model predictions. The model provides insights about the reasons for higher education subsidy in richer countries.
    Keywords: Human Capital; Altrusim; Education Subsidy;
    JEL: D90
    Date: 2010–07–03
  9. By: Elizabeth M. King; Claudio E. Montenegro; Peter F. Orazem
    Abstract: T.W. Schultz (1975) proposed that returns to human capital were highest in economic environments where technology, price or production shocks were common and managerial skills to adapt resource allocations to those shocks were most in need. We hypothesize that variation in returns to human capital across developing countries can be explained in part by government institutions that blunt the magnitude of those shocks or that limit individual abilities to respond to those shocks. Using estimated returns to schooling and experience from 122 household surveys from 86 developing countries, we demonstrate a strong positive correlation between economic freedom and returns to human capital. The positive effect is observed at all quantiles of the wage distribution. Economic freedom benefits the most skilled who get higher returns to schooling; but it also benefits the least skilled who get higher returns from experience.
    Keywords: Returns to Education; Returns to Experience; Economic Freedom, Inequality; Quantiles.
    JEL: J31 O15 P10
    Date: 2010–07
  10. By: Dartanto, Teguh
    Abstract: This research is conducted to quantitatively measure the relationship between corruption and public investment at municipalities’ level in Indonesia. According to Nash Equilibrium derived from mixed strategies, the relationship between corruption and public investment can be both positive and negative depending on the level of the corruption Index. Moreover, the econometric estimations from cross section data and pooled data consistently confirm that the relationship between corruption and public investment is in non linear quadratic form. It was found that the public investment reaches the lowest level when the corruption index ranges from 4.42-4.64.
    Keywords: Corruption; Public Investment; Game Theory; Regional Development
    JEL: H0 R11 C72
    Date: 2010–03
  11. By: Strassmair, Christina
    Date: 2009–11–03
  12. By: Chris Bidner (School of Economics, University of New South Wales)
    Abstract: I analyze a model of human capital development in the presence of peer effects. Parents invest in their child, and this investment conveys a positive externality upon the child’s peers. Parents also acquire wealth, which i) finances consumption, and ii) determines a child’s peer group. I show how the freedom to compete for desirable peers exacerbates the natural underinvestment problem. The analysis thereby produces a general equilibrium framework in which the inefficiencies displayed in a rat-race interact with those stressed in the multi-tasking literature. I consider an extension in which both wealth and parental investment are observed with noise.
    Keywords: Peer Effects; Premarital Investment; Matching; Human Capital
    JEL: D13 C78 D62 J24 D82
    Date: 2010–05
  13. By: Dannenberg, Astrid; Lange, Andreas; Sturm, Bodo
    Abstract: The provision of public goods often relies on voluntary contributions and cooperation. While most of the experimental literature focuses on individual contributions, many real-world problems involve the formation of institutions among subgroups (coalitions) of players. International agreements serve as one example. This paper experimentally tests theory on the formation of coalitions in different institutions and compares those to a voluntary contribution mechanism. The experiment confirms the rather pessimistic conclusions from the theory: only few players form a coalition when the institution prescribes the full internalization of mutual benefits of members. Contrary to theory, coalitions that try to reduce the freeriding incentives by requiring less provision from their members, do not attract additional members. Substantial efficiency gains occur, however, both along the extensive and intensive margin when coalition members can each suggest a minimum contribution level with the smallest common denominator being binding. The experiment thereby shows that the acceptance of institutions depends on how terms of coalitions are reached. --
    Keywords: public goods,institutions,coalition formation,cooperation
    JEL: C72 C92 D71 H41
    Date: 2010

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