nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2012‒01‒03
seventeen papers chosen by
Fabio Sabatini

  1. Seeds of distrust: Conflict in Uganda By Dominic Rohner; Mathias Thoenig; Fabrizio Zilibotti
  2. Predicting the Trend of Well-Being in Germany: How Much Do Comparisons, Adaptation and Sociability Matter? By Stefano Bartolini; Ennio Bilancini; Francesco Sarracino
  3. Rewarding Altruism? A Natural Field Experiment By Nicola Lacetera; Mario Macis; Robert Slonim
  4. Diffusion and contagion in networks with heterogeneous agents and homophily By Matthew O. Jackson; Dunia López Pintado
  5. Life Satisfaction, Social Capital and the Bonding-Bridging Nexus By Maurizio Pugno; Paolo Verme
  6. The determinants of social capital on facebook By Aslý Ertan
  7. Out of Sight, Out of Mind:The Value of Political Connections in Social Networks By Quoc-Anh Do; Bang Dang Nguyen; Yen-Teik Lee; Kieu-Trang Nguyen
  8. Utopia becoming dystopia? Analyzing political trust among immigrants in Sweden By Adman, Per; Strömblad, Per
  9. Social Influence in Trustors’ Neighborhoods By Luigi Luini; Annmaria Nese; Patrizia Sbriglia
  10. Peer effects identified through social networks. Evidence from Uruguayan schools By Gioia De Melo
  11. Peer punishment with third-party approval in a social dilemma game By Tan, Fangfang; Xiao, Erte
  12. Participation in Rotating Savings and Credit Associations in Indonesia: New Empirical Evidence on Social Capital By A. Lasagni; E. Lollo
  13. When strong ties are strong Networks and youth labor market entry By Kramarz, Francis; Nordström Skans, Oskar
  14. Behavioural patterns in social networks By Anna Contea; Daniela T. Di Cagno; Emanuela Sciubbad
  15. Ethnic Networks and the Location Choice of Migrants in Europe By Klaus Nowotny; Dieter Pennerstorfer
  16. Network mechanisms and social ties in markets for low- and unskilled jobs: (theory and) evidence from North-India By Iversen, Vegard Iversen; Torsvik, Gaute
  17. Time Horizon and Cooperation in Continuous Time By Bigoni, Maria; Casari, Marco; Skrzypacz, Andrzej; Spagnolo, Giancarlo

  1. By: Dominic Rohner; Mathias Thoenig; Fabrizio Zilibotti
    Abstract: We study the effect of civil conflict on social capital, focusing on the experience of Uganda during the last decade. Using individual and county-level data, we document causal effects on trust and ethnic identity of an exogenous outburst of ethnic conflicts in 2002-04. We exploit two waves of survey data from Afrobarometer 2000 and 2008, including information on socioeconomic characteristics at the individual level, and geo-referenced measures of fighting events from ACLED. Our identification strategy exploits variations in the intensity of fighting both in the spatial and cross-ethnic dimensions. We find that more intense fighting decreases generalized trust and increases ethnic identity. The effects are quantitatively large and robust to a number of control variables, alternative measures of violence, and different statistical techniques involving ethnic and county fixed effects and instrumental variables. We also document that the post-war effects of ethnic violence depend on the ethnic fractionalization. Fighting has a negative effect on the economic situation in highly fractionalized counties, but has no effect in less fractionalized counties. Our findings are consistent with the existence of a self-reinforcing process between conflicts and ethnic cleavages.
    Keywords: Conflict, trust, ethnic fighting, Uganda, social capital, identity
    JEL: D74 O12 Z1
    Date: 2011–12
  2. By: Stefano Bartolini; Ennio Bilancini; Francesco Sarracino
    Abstract: Using longitudinal data from the German Socio-Economic Panel, we estimate the variation of subjective well-being experienced by Germans over the last two decades testing the role of some of the major correlates of people¿s well-being. Our results suggest that the variation of Germans¿ well-being between 1996 and 2007 is well predicted by changes over time of income, demographics and social capital. The increase in social capital predicts the largest positive change in subjective well-being. Income growth, also predicts a substantial change in subjective well-being, but it is compensated for about three fourths by the joint negative predictions due to income comparison and income adaptation. Finally, we find that aging of the population predicts the largest negative change in subjective well-being. This result appears to hinge on the large loss of satisfaction experienced by individuals in old age.
    Keywords: Subjective well-being, life satisfaction, social capital, sociability, relational goods, relative income, social comparisons, income adaptation, SOEP
    JEL: I3 O1
    Date: 2011
  3. By: Nicola Lacetera (University of Toronto at Mississauga - Department of Management); Mario Macis (Johns Hopkins University); Robert Slonim (University of Sydney)
    Abstract: We present evidence from a natural field experiment involving nearly 100,000 individuals on the effects of offering economic incentives for blood donations. Subjects who were offered economic rewards to donate blood were more likely to donate, and more so the higher the value of the rewards. They were also more likely to attract others to donate, spatially alter the location of their donations towards the drives offering rewards, and modify their temporal donation schedule leading to a short-term reduction in donations immediately after the reward offer was removed. Although offering economic incentives, combining all of these effects, positively and significantly increased donations, ignoring individuals who took additional actions beyond donating to get others to donate would have led to an under-estimate of the total effect, whereas ignoring the spatial effect would have led to an over-estimate of the total effect. We also find that individuals who received a reward by surprise were less likely to donate after the intervention than subjects who received no reward, suggesting that for some individuals a surprise reward adversely affected their intrinsic motivations. We discuss the implications of these findings for understanding pro-social behavior.
    Date: 2011–12
  4. By: Matthew O. Jackson (Department of Economics, Stanford University, Santa Fe Institute, and CIFAR); Dunia López Pintado (Department of Economics, Universidad Pablo de Olavide)
    Abstract: We study how a behavior (an idea, buying a product, having a disease, adopting a cultural fad or a technology) spreads among agents in an a social network that exhibits segregation or homophily (the tendency of agents to associate with others similar to themselves). Individuals are distinguished by their types (e.g., race, gender, age, wealth, religion, profession, etc.) which, together with biased interaction patterns, induce heterogeneous rates of adoption. We identify the conditions under which a behavior diffuses and becomes persistent in the population. These conditions relate to the level of homophily in a society, the underlying proclivities of various types for adoption or infection, as well as how each type interacts with its own type. In particular, we show that homophily can facilitate diffusion from a small initial seed of adopters.
    Keywords: Diffusion, Homophily, Segregation, Social Networks
    JEL: D85 D83 C70 C73 L15 C45
    Date: 2011–12
  5. By: Maurizio Pugno (University of Cassino); Paolo Verme (University of Torino)
    Abstract: The paper investigates the relation between social capital and life satisfaction focusing on the distinction between bonding and bridging as introduced by Putnam (2000). Using the latest version of the combined World and European Values Surveys, we first address the question of measurement of social capital by means of a multi-step factor analysis. Through this procedure, we find that proxies typically used for social capital tend to polarize around two dimensions interpreted as bonding and bridging. These two dimensions are in fact associated with a single latent variable with opposite signs suggesting that they describe two sides of the same latent variable rather than two independent latent variables. We call this latent variable the locus of socializing and use it to explore the relation between social capital and life satisfaction across world citizens and across groups of similar countries. The results indicate that people with extreme bonding or bridging behavior are less happy than people with more balanced attitudes. Unlike the literature on social capital and economic growth that finds bridging attitudes more desirable than bonding attitudes, we find that bonding attitudes are at least as important as bridging attitudes for life satisfaction. This suggests that the social capital dimensions important for economic growth may not necessarily coincide with the social capital dimensions important for life satisfaction.
    Keywords: Life Satisfaction, Social Capital, Bonding, Bridging
    JEL: A13 D6 I3 Z1
    Date: 2011–12–12
  6. By: Aslý Ertan (TEKPOL, Science and Technology Policy Studies, Middle East Technical University)
    Abstract: This paper investigates the effect of socioeconomic status, trust and privacy concerns, and socio psychological factors on building three structural measures of social capital, which are bridging, bonding and network size (degree). Using online survey data, I find the evidence that trust and privacy concerns, being a female, and the number of hours spent in Facebook are significant determinants of bridging social capital and degree. I show that females and respondents that have trust and privacy concerns are less likely to build bridging social capital. In addition to this, the number of hours spent on Facebook is positively related to the probability of engaging in bridging social capital. The results also suggest that females are less likely to increase their network size. On the other hand, respondents that spend more hours on Facebook and respondents that come from high-income class are more likely to increase their network size.
    Keywords: Social capital, Facebook, trust and privacy concern, socio-economic status, socio-psychological factors
    Date: 2011–08
  7. By: Quoc-Anh Do (School of Economics, Singapore Management University, Singapore 178903); Bang Dang Nguyen (Finance and Accounting Group, Judge Business School, University of Cambridge, Cambridge CB2 1AG, U.K); Yen-Teik Lee (Department of Finance, Lee Kong Chian School of Business, Singapore Management University, Singapore 178899); Kieu-Trang Nguyen (SPEA, Indiana University, Bloomington, IN 47401, U.S.A)
    Abstract: This paper investigates the impact of social-network connections to politicians on firm value. We focus on the networks of university classmates and alumni among directors of U.S. public firms and congressmen. Using the Regression Discontinuity Design based on close elections from 2000 to 2008, we identify that a director’s connection to an elected congressman causes a Weighted Average Treatment Effect on Cumulative Abnormal Returns of -2.65% surrounding the election date. The effect is robust and consistent through various specifications, parametric and nonparametric, with different outcome measures and social network definitions, and across many subsamples. We find evidence to support the hypothesis that firms benefit more when connected politicians remain in state politics than when they move to federal office. Overall, our study identifies the value of political connections through social networks and uncovers its variation across different states and between state and federal political environments.
    Keywords: Social network; political connection; close election; regression discontinuity design; firm value.
    JEL: D72 D73 D85 G3 G10 G11 G14 G30 C21
    Date: 2011–12
  8. By: Adman, Per (Department of Government, Uppsala University); Strömblad, Per (Institute for Futures Studies)
    Abstract: This paper aims to increase our knowledge on the political trust of immigrants’ in established democracies. Utilising Swedish survey data, based on a large oversample of respondents with a foreign background, we show that immigrants from countries more plagued by corruption place significantly higher trust in political institutions in Sweden in comparison with both immigrants from more auspicious institutional settings and with the native population. However, we also find that an initially bright view of the Swedish institutional qualities tend to attenuate over time, as immigrants from countries of high corruption develop more critical viewpoints. In con-trast to reasonable expectations, we nonetheless find that this decrease in trust is not explained by experiences of discrimination. Overall, the hypotheses elaborated and tested in this paper may be regarded as a more general contribution to a theory on how political trust is related to experiences and expectations of political institutions.
    Keywords: political trust of immigrants’; Swedish survey data; experiences and expectations of political institutions
    JEL: C42
    Date: 2011–12–19
  9. By: Luigi Luini; Annmaria Nese; Patrizia Sbriglia
    Abstract: Economists have often analysed the impact that the spread of beliefs and behaviors have on the equilibrium and performance of markets. Recent experimental studies on peer pressure in groups of agents interacting in investment and gift exchange games (Mittone and Ploner, 2011, Gachter et al. 2010) have proved that the imitation of partners’ behaviors can have substantial effects on reciprocity, thus confirming that the effects of information also need to be studied in games where social preferences play a fundamental role. The aim of this paper is to ascertain whether trust is affected by contagion and herding in small groups of trustors who can observe each other’s choices over time. We account for three important factors of trustors’ preferences,namely: risk attitude, generosity and expected trustworthiness. Using our data we test the basic hypothesis that an individual's propensity to trust recipients in the Trust Game can be affected by the observed behavior of other trustors. Our results confirm that trust is affected by contagion effects. Furthermore, we find that specific types of agents (generous or untrusting) more often imitate the same type, when positioned in the same group. Finally, we find that untrusting individuals are less affected by their peers compared to generous individuals, and they imitate less even when positioned in groups of agents who have the same characteristics.
    Keywords: trust game, experiments, social influence, imitation
    JEL: C72 C91
    Date: 2011–11
  10. By: Gioia De Melo
    Abstract: This paper provides evidence on peer effects in educational achievement exploiting for the first time a unique data set on social networks within primary schools in Uruguay. The relevance of peer effects in education is still largely debated due to the identification challenges that the study of social interactions poses. I adopt a recently developed identification method that exploits detailed information on social networks, i.e. individual-specific peer groups. This method enables me to disentangle endogenous effects from contextual effects via instrumental variables that emerge naturally from the network structure. Correlated effects are controlled, to some extent, by classroom fixed effects. I find significant endogenous effects in standardized tests for reading and math. A one standard deviation increase in peers’ test score increases the individual’s test score by 40% of a standard deviation. This magnitude is comparable to the effect of having a mother that completed college. By means of a simulation I illustrate that when schools are stratified by socioeconomic status peer effects may operate as amplifiers of educational inequalities.
    JEL: I21 I24 O1
    Date: 2011–11
  11. By: Tan, Fangfang; Xiao, Erte
    Abstract: This paper investigates how punishment promotes cooperation when the punishment enforcer is a third party independent of the implicated parties who propose the punishment. In a prisoner's dilemma experiment, we find an independent third party vetoes not only punishment to the cooperators but punishment to the defectors as well. Compared with the case when the implicated parties are allowed to punish each other, both the cooperation rate and the earnings are lower when the enforcement of punishment requires approval from an independent third party.
    Keywords: Social dilemmas; third party; punishment; cooperation; experiment
    JEL: D63 C92 C72
    Date: 2011–12–21
  12. By: A. Lasagni; E. Lollo
    Abstract: Indonesia has a rich historical tradition of mutual cooperation at the community level. This study argues that rotating savings and credit associations (ROSCAs) constitute successful experiences of collective action within the informal financial sector. Therefore, using data from Indonesia Family Life Surveys, it explores the relationship between social capital and ROSCA participation and extends existing models from individual- to community-level determinants. The endowment of social capital at the village level correlates positively with individual ROSCA participation, because community social capital provides individual members with the resources needed to overcome self-selection and foster coordination -two main characteristics of ROSCAs. These results provide new evidence on the role of social capital for fostering collective action and offer new insights about community-driven development.
    Keywords: ROSCAs, informal finance, rotating savings, Indonesia
    JEL: D14 G29 O12 O53
    Date: 2011
  13. By: Kramarz, Francis (Center for Research in Economics and Statistics (CREST), CEPR, IZA, IFAU); Nordström Skans, Oskar (Uppsala Center for Labor Studies)
    Abstract: The conditions under which young workers find their first real post-graduation jobs are both very important for the young’s future careers and insufficiently known given their public policy implications. To study these conditions, and in particular the role played by networks, we use a Swedish population-wide linked employer-employee data set of graduates from all levels of schooling which includes detailed information on family ties, neighborhoods, schools, and class composition over a period covering high as well as low unemployment years. We find that strong social ties (parents) are an important determinant of where young workers find their first job. This remarkably robust effect is estimated controlling for all confounding factors related to time, location, education, occupation, and the interaction of these. The effect is larger if the graduate’s position is “weak” (low education) or during high unemployment years, a pattern which does not emerge when analyzing the role of weak ties (neighbors or friends as measured using classmates and their parents). On the hiring side, by contrast, the effects are larger if the parent’s position is “strong” (e.g. by tenure or wage). We find no evidence of substitution in recruitment over time and fields induced by “family ties hires”. However, we do find that, just after their child is hired in their plant, parents experience a sharp drop in their wage growth. Overall, our results show that strong (family) ties are more important in the job finding process of young workers in weak positions than those weak ties usually measured in the literature (neighbors, in particular), suggesting that labor market experience and education are essential conditions for weak ties to be strong.
    Keywords: Weak ties; social networks; youth employment
    JEL: J24 J62 J64
    Date: 2011–10–27
  14. By: Anna Contea (Max Planck Institute of Economics, Jena); Daniela T. Di Cagno (LUISS University, Rome); Emanuela Sciubbad (Birkbeck College, University of London)
    Abstract: In this paper, we focus on the analysis of individual decision making for the formation of social networks, using experimentally generated data. We first analyse the determinants of the individual demand for links under the assumption of agents' static expectations. The results of this exercise subsequently allow us to identify patterns of behaviour that can be subsumed in three strategies of link formation: 1) reciprocator strategy - players propose links to those from whom they have received link proposals in the previous round; 2) myopic best response strategy - players aim to profit from maximisation; 3) opportunistic strategy - players reciprocate link proposals to those who have the largest number of connections. We find that these strategies explain approximately 76% of the observed choices. We finally estimate a mixture model to highlight the proportion of the population who adopt each of these strategies.
    Keywords: Network formation, Experiments, Multivariate probit models, Mixture models
    JEL: C33 C35 C90 D85
    Date: 2011–12–20
  15. By: Klaus Nowotny (WIFO); Dieter Pennerstorfer (WIFO)
    Abstract: In this paper we analyse the role of ethnic networks in the location decision of migrants to the EU 15 at the regional level. Using a random parameters logit specification we find a substantially positive effect of ethnic networks on the location decision of migrants. The effect is, however, decreasing in network size. Furthermore, we find evidence of spatial spillovers in the effect of ethnic networks: ethnic networks in neighbouring regions significantly help to explain migrants' choice of target regions. The positive effects of ethnic networks thus also extend beyond regional and national borders. Analysing the trade-off between potential income and network size, we find that migrants would require a sizeable compensation for living in a region with a smaller ethnic network, especially when considering regions where only few previous migrants from the same country of origin are located.
    Keywords: network migration, ethnic networks, random parameters
    Date: 2011–12–19
  16. By: Iversen, Vegard Iversen (University of Manchester); Torsvik, Gaute (Department of Economics, University of Bergen)
    Abstract: Abstract: Workplace referrals may resolve incentive problems that arise due to incomplete contracts. We use an in-depth primary data set covering low- and unskilled migrants from Western Uttar Pradesh (India), to examine this and alternative explanations for referral-based recruitment. We find little evidence of referral screening for unobservable worker traits, but some support for a hypothesis of referral as a mechanism to enforce workforce discipline. Two observations back this conjecture: the high prevalence of strong kinship ties between referees and new recruits and that those who recruit are in more ‘prestigious’ jobs and therefore have higher stakes vis-à-vis their employer. These main findings are exposed to robustness checks to rule out rival explanations: that entry through a workplace insider merely reflects privileged access to job vacancy information; that workplace clustering results from preferences for working together or that the higher prevalence of referral for very young migrants that we observe may reflect that referral has an insurance dimension.
    Keywords: Work Migration; Social Networks; Screening; Moral Hazard
    JEL: J24 J61 R23 Z13
    Date: 2011–12–15
  17. By: Bigoni, Maria (University of Bologna); Casari, Marco (University of Bologna); Skrzypacz, Andrzej (Stanford University); Spagnolo, Giancarlo (University of Rome "Tor Vergata" and Stockholm School of Economics)
    Abstract: When subjects interact in continuous time, their ability to cooperate may dramatically increase. In an experiment, we study the impact of different time horizons on cooperation in (quasi) continuous time prisoner's dilemmas. We find that cooperation levels are similar or higher when the horizon is deterministic rather than stochastic. Moreover, a deterministic duration generates different aggregate patterns and individual strategies than a stochastic one. For instance, under a deterministic horizon subjects show high initial cooperation and a strong end-of-period reversal to defection. Moreover, they do not learn to apply backward induction but to postpone defection closer to the end.
    JEL: C72 C73 C91 C92 D74
    Date: 2011–11

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