nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2011‒09‒05
sixteen papers chosen by
Fabio Sabatini

  1. Tastes, Castes, and Culture: The Influence of Society on Preferences By Fehr, Ernst; Hoff, Karla
  2. Friends’ networks and job finding rates By Cappellari, Lorenzo; Tatsiramos, Konstantinos
  3. Social Ties and User-Generated Content: Evidence from an Online Social Network By Shriver, Scott K.; Nair, Harikesh S.; Hofstetter, Reto
  4. Entrepreneurship within Urban and Rural Areas. Individual Creativity and Social Network By Lucio Carlos Friere-Gibb; Nielsen Kristian
  5. Do Religious Proscriptions Matter? Evidence from a Theory-Based Test By Daniel M. Hungerman
  6. An experimental inquiry into the nature of relational goods By Lotito, Gianna; Migheli, Matteo; Ortona, Guido
  7. Social Interactions in the Labor Market By Grodner, Andrew; Kniesner, Thomas J.; Bishop, John A.
  8. Olson’s Paradox Revisited: An Empirical Analysis of Incentives to Contribute in P2P File-sharing Communities. By Thierry Pénard, University of Rennes 1 - CREM-CNRS; Sylvain Dejean, CREM-CNRS, Marsouin; Raphaël Suire, University of Rennes 1 - CREM-CNRS
  9. Xenophobic Attacks, Migration Intentions and Networks: Evidence from the South of Africa By Friebel, Guido; Gallego, Juan Miguel; Mendola, Mariapia
  10. Death Caused By Natural Disasters: The Role Of Ethnic Heterogeneity By Eiji Yamamura
  11. Does the Internet make people happier ? By Thierry Pénard, University of Rennes 1 - CREM-CNRS, Marsouin; Nicolas Poussing, CEPS / INSTEAD, CREM-CNRS; Raphaël Suire, University of Rennes 1 - CREM-CNRS, Marsouin
  12. Innovation performance and embeddedness in networks: evidence from the Ethiopian footwear cluster By Gebreeyesus, Mulu; Mohnen, Pierre
  13. The networks of the solo self-employed and their success By Sierdjan Koster; Nardo de Vries
  14. Changing Identity: Retiring from Unemployment By Clemens Hetschko; Andreas Knabe; Ronnie Schöb
  15. Big Experimenter Is Watching You! Anonymity and Prosocial Behavior in the Laboratory By Barmettler, Franziska; Fehr, Ernst; Zehnder, Christian
  16. Institutions and growth: a developing country case study By Luciano Nakabashi; Adolfo Sachsida; Ana Elisa Gonçalves Pereira

  1. By: Fehr, Ernst (University of Zurich); Hoff, Karla (World Bank)
    Abstract: Economists have traditionally treated preferences as exogenously given. Preferences are assumed to be influenced by neither beliefs nor the constraints people face. As a consequence, changes in behaviour are explained exclusively in terms of changes in the set of feasible alternatives. Here we argue that the opposition to explaining behavioural changes in terms of preference changes is ill-founded, that the psychological properties of preferences render them susceptible to direct social influences, and that the impact of "society" on preferences is likely to have important economic and social consequences.
    Keywords: endogenous preferences, culture, caste, frames, anchors, elicitation devices
    JEL: A12 A13 D01 K0
    Date: 2011–08
  2. By: Cappellari, Lorenzo; Tatsiramos, Konstantinos
    Abstract: Social interactions have important consequences for labour market outcomes. Yet the growing literature has relied on indirect definitions of networks. We present the first evidence based on direct information on friends networks. We address issues of correlated effects with instrumental variables and panel data. We find large network effects, which persist even after controlling for family networks. One additional employed friend increases a persons job finding probability by approximately 13 percent. This is a result of endogenous social interactions. We also provide the first evidence that network effects operate through information transmission rather than through social norms or leisure complementarities.
    Date: 2011–08–19
  3. By: Shriver, Scott K. (Columbia University); Nair, Harikesh S. (Stanford University); Hofstetter, Reto (University of St Gallen)
    Abstract: We use variation in wind speeds at surfing locations in Switzerland as exogenous shifters of users' propensity to post content about their surfing activity onto an online social network. We exploit this variation to test whether users' online content generation activity has a causal effect on their social ties. Under weak monotonicity assumptions, we also estimate nonparametric bounds on the causal effect of user's social ties in turn on their content generation activity. Economically significant causal effects of the type above can produce positive feedback that generates local network effects in content generation. We find evidence for such network effects. We argue this feedback generates a multiplier effect on interventions that subsidize tie formation. We use our estimates to measure the ROI from such interventions and discuss implications for the site's monetization strategy. Our empirical strategy provides one way to address a significant identification challenge with online social network data that the observed network structure is endogenous to the actions taken by agents on the network. Augmenting the model of agent's actions with a model for the network structure requires solving a formidable network formation game. Our approach to this problem is to conduct inference with an incomplete model of network formation under weak assumptions that deliver informative bounds on the causal effects of interest, while avoiding taking a strong stand on a specific model of network formation.
    Date: 2011–08
  4. By: Lucio Carlos Friere-Gibb; Nielsen Kristian
    Abstract: The entrepreneurial dynamics of urban and rural areas are different, and this paper explores ’individual creativity’ and social network factors in both places. The probabilities of becoming an entrepreneur and of surviving are analyzed. The results are based on longitudinal data combined with a questionnaire, utilizing responses from 1,108 entrepreneurs and 420 non-entrepreneurs. Creativity is only found to be relevant for start-up in urban areas, but it does not influence survival in any of the two areas. The social network matters, in particular in rural areas. By combining the person and the environment, common entrepreneurship beliefs can be questioned and entrepreneurship theory benefited.
    Keywords: Entrepreneurship; Urban; Rural
    JEL: L26 O18
    Date: 2011
  5. By: Daniel M. Hungerman
    Abstract: A large literature shows that religious participation is associated with a wide range of behaviors and outcomes, but what drives this association is unclear. On the one hand, this association may stem from correlations in preferences, where those with tastes for religion coincidentally have particular tastes for other behaviors as well. Alternately, religious participation may directly affect behavior; for example many religious organizations impose rules and proscriptions on their members and these rules may affect members’ decisions. Using the canonical economic model of religiosity, I develop an empirical test to investigate the importance of religious proscriptions on behavior. Several empirical applications of this test are conducted; the results indicate a strong role for religious proscriptions in determining behavior. The test developed here does not require an instrumental variable for religion and could be applied to the study of criminal gangs, terrorist organizations, fraternities, communes, political groups, and other “social clubs.”
    JEL: H23 I1 Z12
    Date: 2011–08
  6. By: Lotito, Gianna; Migheli, Matteo; Ortona, Guido
    Abstract: Our experiment aims at studying the impact of two types of relational goods on the voluntary contributions to the production of a public good, i.e. acquaintance among the contributors and having performed a common work before the experiment. We implement two treatments with 128 participants from two different groups. In the first treatment the subjects are left talking in a room before the experiment (cheap talk treatment); they are not suggested any particular topic to talk about, nor are they requested to perform any activity in particular. The second treatment involves the performance of a common work (namely, the computation of some indices of economic performance of three companies, based on their balance sheets). The two groups of subjects are composed either by people with or without previous acquaintance. An equal number of subjects from each of these groups is then allocated to either treatment. After that the subjects played a standard 10-rounds public goods game in groups of 4. The groups were gender-homogeneous. This allows us also to inquire for the possible presence of a gender effect in our experiment. Our results show that: 1) both common work and previous acquaintance increase the average contribution to the public good, 2) there is a relevant gender effect with women contributing more or less than men, depending on the treatment. Therefore, we conclude that relational goods are important to enhance cooperation, that acquaintance and working together are rather complements than substitutes, and that different relational goods produce different effects on cooperation. Also, we find further evidence for women's behaviour to be more context-specific than men's.
    Keywords: relational goods; public goods experiments; gender effect
    JEL: C91 H41
    Date: 2011–08
  7. By: Grodner, Andrew (East Carolina University); Kniesner, Thomas J. (Syracuse University); Bishop, John A. (East Carolina University)
    Abstract: We examine theoretically and empirically social interactions in labor markets and how policy prescriptions can change dramatically when there are social interactions present. Spillover effects increase labor supply and conformity effects make labor supply perfectly inelastic at a reference group average. The demand for a good may also be influenced by either a spillover effect or a conformity effect. Positive spillover increases the demand for the good with interactions, and a conformity effect makes the demand curve pivot to become less price sensitive. Similar social interactions effects appear in the associated derived demands for labor. Individual and community factors may influence the average length of poverty spells. We measure local economic conditions by the county unemployment rate and neighborhood spillover effects by the racial makeup and poverty rate of the county. We find that moving an individual from one standard deviation above the mean poverty rate to one standard deviation below the mean poverty rate (from the inner city to the suburbs) lowers the average poverty spell by 20–25 percent. We further consider overall labor market outcomes by examining theoretically the socially optimal wealth distribution. Interdependence in utility can mitigate the need to transfer wealth to low-wage individuals and may require them to be poorer by all objective measures. Finally, we quantify how labor market policy changes when there are household social interactions. Labor supply estimates indicate positive economically important spillovers for adult U.S. men. Ignoring or incorrectly considering social interactions can mis-estimate the labor supply response of tax reform in the United States by as much as 60 percent.
    Keywords: social interactions, spillover, conformity, inequality, poverty, labor supply, reference group, social multiplier, income tax, PSID
    JEL: D11 J22 Z13 D31 D63
    Date: 2011–08
  8. By: Thierry Pénard, University of Rennes 1 - CREM-CNRS; Sylvain Dejean, CREM-CNRS, Marsouin; Raphaël Suire, University of Rennes 1 - CREM-CNRS
    Abstract: This article aims to examine how the size of file-sharing communities affects their functioning and performance (i.e. their capacity to share content). Olson (1965) argued that small communities are more able to provide collective goods. Using an original database on BitTorrent file-sharing communities, our article finds a positive relationship between the size of a community and the amount of collective goods provided. But, the individual incentives to contribute slightly decrease with community size. These results seem to indicate that Peer to Peer file-sharing communities provide a pure (non rival) public good. We also show that specialized communities are more efficient than general communities to promote cooperative behavior. Finally, the rules designed by the administrators of these communities play an active role to manage voluntary contributions and improve file-sharing performance.
    Keywords: Olson’s paradox, collective goods, Peer-to-Peer, File-sharing, community
    JEL: H41 L86 K42
    Date: 2011–08
  9. By: Friebel, Guido (Goethe University Frankfurt); Gallego, Juan Miguel (University of Toulouse I); Mendola, Mariapia (University of Milan Bicocca)
    Abstract: We investigate how emigration flows from a developing region are affected by xenophobic violence at destination. Our empirical analysis is based on a unique survey among more than 1000 households, collected in Mozambique in summer 2008, a few months after a series of xenophobic attacks in South Africa killed dozens and displaced thousands of immigrants from neighbouring countries. We estimate migration intentions of Mozambicans before and after the attacks, controlling for the characteristics of households and previous migration behaviour. Using a placebo period, we show that other things equal, the migration intention of household heads decreases from 37% to 33%. The sensitivity of migration intentions to violence is larger for household heads with many children younger than 15 years, decreasing the migration intention by 11% points. Most importantly, the sensitivity of migration intentions is highest for those household heads with many young children whose families have no access to social networks. For these household heads, the intention falls by 15% points. Social networks provide insurance against the consequences young children suffer in case the household head would be harmed by xenophobic violence and consequently could not provide for the family.
    Keywords: household behaviour, risk, violence, Mozambique
    JEL: O1 R2 J6 D1
    Date: 2011–08
  10. By: Eiji Yamamura
    Abstract: Kahn (2005) found that ethnic heterogeneity reduces the number of deaths caused by natural disasters, a finding that is contrary to theoretical predictions. This paper casts doubt on this finding and uses cross-country data from 1965 to 2008 to conduct a re-estimation. To alleviate omitted variable bias, a legal origin dummy and additional economic variables are incorporated as independent variables. Further, to control for measurement problems, I have included an ethnic fractionalization index and an ethnic polarization index to capture ethnic heterogeneity. The key finding is that ethnic polarization is positively related to number of deaths, while ethnic fractionalization is not. This implies that ethnic polarization increases the level of damage caused by natural disasters, and is a more appropriate measure for ethnic heterogeneity than ethnic fractionalization.
    Keywords: Deaths, Natural disaster, Ethnic fractionalization, Ethic polarization, Legal origin, Institution.
    JEL: D81 O11 Q54 Z13
    Date: 2011–08–10
  11. By: Thierry Pénard, University of Rennes 1 - CREM-CNRS, Marsouin; Nicolas Poussing, CEPS / INSTEAD, CREM-CNRS; Raphaël Suire, University of Rennes 1 - CREM-CNRS, Marsouin
    Abstract: As people are spending more time online, it is important to evaluate the impact of Internet use on individual well-being. Internet use yields direct utility and economic returns (e.g. better job, higher productivity) that may increase life satisfaction. But the Internet might also have detrimental effects (addiction, social isolation, e.g.). This paper empirically examines the relation between Internet use and subjective well-being. Using Luxemburgish data from a European social survey, we find evidence that non users are less satisfied in their life than Internet users. This result holds when we control for socio-demographic characteristics, social capital, values and beliefs, and health and income. Moreover, the positive influence of Internet use is stronger for low income and young individuals. These findings suggest that public policy aiming to reduce the digital divide are socially desirable
    Keywords: Internet, happiness, well-being, digital divide, social capital, social values
    JEL: A12 D12 D6 H4 L86 Z13
    Date: 2011–07
  12. By: Gebreeyesus, Mulu (UNU-MERIT); Mohnen, Pierre (UNU-MERIT, Maastricht University)
    Abstract: This study focuses on innovation in a cluster of informal shoemaking firms in Ethiopia - namely the Mercato footwear cluster. It examines how differently those firms are embedded in networks and how heterogeneous they are in absorptive capacity, and how this heterogeneity affects their innovation performance. Business interactions with buyers, suppliers and other producers are the major channels through which knowledge flows into the cluster. These business networks are mainly built on trust and long-term relationships and tend to be selective. The study reveals that despite homogeneity in social background the firms in the cluster behave and perform differently. Based on econometric analysis we document a positive and strong effect of local network position and absorptive capacity on innovation performance.
    Keywords: industrial clusters, networks, innovation performance, informal sector, Africa, Ethiopia
    JEL: O17 O31 O33
    Date: 2011
  13. By: Sierdjan Koster; Nardo de Vries
    Abstract: An increasing proportion of the Dutch labour market is formed by the solo selfemployed (i.e. one person enterprises, mainly offering their own human capital). Knowledge on solo self-employed is still limited and this makes tailoring policy measures towards this group difficult. Their network position may play a crucial role in economic performance of solo self-employed, as resources available are by definition limited. They are likely to depend heavily on their professional networks for acquisition and mobilizing additional resources. In this paper we use a specially constructed panel of solo self-employed from the Netherlands to explore the motives, gestation and spatial extent of their networks. (Multinomial) logit models are used to relate network position to their economic performance. The results suggest that the motives for and gestation of cooperation between solo self-employed differ from other groups of entrepreneurs. In contrast to existing ideas about network benefits, information sharing and knowledge spill-overs are not an important motive for solo self-employed. Rather, they focus on executing jobs and joint acquisition. Finally, we find that in terms of success a good network position is negatively related to economic performance. In more detail, cooperation on scope is connected to success, whereas joined acquisition is related to poor performing solo self-employed. It seems that solo self-employed reach out to their colleagues when business is slow.  
    Date: 2011–08–29
  14. By: Clemens Hetschko (Faculty of Economics and Business, FU Berlin); Andreas Knabe (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Ronnie Schöb (Faculty of Economics and Business, FU Berlin)
    Abstract: Using data from the German Socio-Economic Panel from 1984-2009, we follow persons from their working life into their retirement years and find that, on average, employed people maintain their life satisfaction upon retirement, while long-term unemployed people report a substantial increase in their life satisfaction when they retire. These results are robust to controlling for changes in other life circumstances and suggest that retiring is associated with a switch in the relevant social norms that causes an increase in identity utility for the formerly unemployed. This is supportive of the idea that, by including identity in the utility function, results from the empirical life satisfaction literature can be reconciled with the economic theory of individual utility.
    Keywords: life satisfaction, retirement, unemployment, identity, social norm
    JEL: I31 J26
    Date: 2011–07
  15. By: Barmettler, Franziska (Foundation for Global Sustainability); Fehr, Ernst (University of Zurich); Zehnder, Christian (University of Lausanne)
    Abstract: Social preference research has received considerable attention in recent years. Researchers have demonstrated that the presence of people with social preferences has important implications in many economic domains. However, it is important to be aware of the fact that the empirical basis of this literature relies to a large extent on experiments that do not provide anonymity between experimenter and subject. It has been argued that this lack of experimenter-subject anonymity may create selfish incentives to engage in seemingly other-regarding behavior. If this were the case these experiments would overestimate the importance of social preferences. Previous studies provide mixed results and methodological differences within and across studies make it difficult to isolate the impact of experimenter-subject anonymity on prosocial behavior. In this paper we use a novel procedure that allows us to examine the impact of the exact same ceteris-paribus variation in anonymity on behavior in three of the most commonly used games in the social preference literature. Our data does not support the hypothesis that introducing experimenter-subject anonymity affects observed prosocial behavior. We do not observe significant effects of experimenter-subject anonymity on prosocial behavior in any of our games.
    Keywords: laboratory experiments, anonymity, scrutiny, prosocial behavior
    JEL: C91
    Date: 2011–08
  16. By: Luciano Nakabashi (Universidade Federal do Paraná); Adolfo Sachsida (IPEA e CNPq); Ana Elisa Gonçalves Pereira (Universidade Federal do Paraná)
    Abstract: The Brazilian municipalities show an enormous inequality on its development level. Even within the states considered relatively prosperous, there are huge internal disparities on income levels. The richest Brazilian municipality's GDP per capita is about 190 times greater than the poorest municipality's, according to IBGE (2000) database. A possible explanation for this phenomenon relies on institutional theory. Many theoretical and empirical studies, mainly based on cross-country data, emphasize the role played by institutions on the determination of long run development. Nevertheless, there still is little research concerning the income differences within the national territory and its connection to institutional quality. The literature points out that institutions matter for the level of economic development because of their effects on political power distribution, generation of economic opportunities, innovation, human capital accumulation, and so on. Based on this assumption, the present study main goal is to analyze the effects of Brazilian municipalities' institutional quality on their GDP per capita levels. The results indicate that institutions are relevant and its importance is greater for large municipalities. On the other hand, human capital human capital is more important to small municipalities. To address the endogeneity problem inherent to the relationship between institutions and development, we employ the 2SLS method.
    Keywords: institutions, income level, brazilian municipalities
    JEL: C13 O11
    Date: 2011

This nep-soc issue is ©2011 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.