nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2014‒01‒24
seventeen papers chosen by
Fabio Sabatini
La Sapienza University of Rome

  1. Trust your neighbour. Industrial relatedness, social capital and outsourcing By Roberto Antonietti; Maria Rosaria Ferrante; Riccardo Leoncini
  2. Digital Discrimination: The Case of By Benjamin Edelman; Micahel Luca
  3. Optimistic expectations or other-regarding preferences? Analysing the determinants of trust among association members By Giacomo Degli Antoni; Gianluca Grimalda
  4. Universalism vs. particularism: a round trip from sociology to economics By Guido de Blasio; Diego Scalise; Paolo Sestito
  5. Natural disasters, growth and institutions: a tale of two earthquakes By Guglielmo Barone; Sauro Mocetti
  6. The Signaling Value of Online Social Networks: Lessons from Peer-to-Peer Lending By Seth Freedman; Ginger Zhe Jin
  7. Disentangling the link between health and social capital: A comparison of immigrant and native-born populations in Spain By Stoyanova, Alexandrina Petrova; Díaz Serrano, Lluís
  8. Voluntary work and wages By Bruno, Bruna; Fiorillo, Damiano
  9. Four Interpretations of Social Capital: An Agenda for Measurement By Katherine Scrivens; Conal Smith
  10. Migration, Friendship Ties and Cultural Assimilation By Facchini, Giovanni; Patacchini, Eleonora; Steinhardt, Max
  11. Migrant Remittances and Information Flows: Evidence from a Field Experiment By Catia Batista; Gaia Narciso
  12. The Formation of Migrant Networks By Margherita Comola; Mariapia Mendola
  13. Sign Me Up! A Model and Field Experiment on Volunteering By Erte Xiao; Daniel Houser
  14. Employment Dynamics and Redistributive Policies under Workers' Social Norms By Dos Santos Ferreira, Rodolphe; Lloyd-Braga, Teresa; Modesto, Leonor
  15. Migrant Networks and the Spread of Misinformation By Elsner, Benjamin; Narciso, Gaia; Thijssen, Jacco J. J.
  16. Pride and Patronage - The effect of identity on pay-what-you-want prices at a charitable bookstore By Christina Gravert
  17. Mathematical Foundations for the Economy of Giving By W. P. Weijland

  1. By: Roberto Antonietti; Maria Rosaria Ferrante; Riccardo Leoncini
    Abstract: Relying on a unique dataset of small, machine-tool firms located in Emilia Romagna, Italy, we estimate the separate effects of industrial relatedness and social capital on the propensity to fully or partially outsource production activities. We focus on a series of 29 production phases, for which we have information on whether they are accomplished in-house or outside the firm. After controlling for endogeneity, we find that: (i) full outsourcing is positively related to social capital, but this effect vanishes as industrial proximity with neighbouring firms increases; and (ii) firms engage in concurrent sourcing only when industrial relatedness with neighbouring firms is high. Also phase estimates show that: (iii) while social capital matters for full outsourcing of core activities, for full outsourcing of peripheral activities it is industrial relatedness that is relevant; and (iv) there is no significant effect of either industrial relatedness or social capital on the concurrent sourcing of core and peripheral activities.
    Keywords: concurrent sourcing, full outsourcing, industrial relatedness, social capital, machine-tool industry
    JEL: A13 D23 L23 L24 L64 R12
    Date: 2014–01
  2. By: Benjamin Edelman (Harvard Business School, Negotiation, Organizations & Markets Unit); Micahel Luca (Harvard Business School, Negotiation, Organizations & Markets Unit)
    Abstract: Online marketplaces often contain information not only about products, but also about the people selling the products. In an effort to facilitate trust, many platforms encourage sellers to provide personal profiles and even to post pictures of themselves. However, these features may also facilitate discrimination based on sellers' race, gender, age, or other aspects of appearance. In this paper, we test for racial discrimination against landlords in the online rental marketplace Using a new data set combining pictures of all New York City landlords on Airbnb with their rental prices and information about quality of the rentals, we show that non-black hosts charge approximately 12% more than black hosts for the equivalent rental. These effects are robust when controlling for all information visible in the Airbnb marketplace. These findings highlight the prevalence of discrimination in online marketplaces, suggesting an important unintended consequence of a seemingly-routine mechanism for building trust.
    Date: 2014–01
  3. By: Giacomo Degli Antoni (University of Parma, Department of Law; Econometica, Inter-University Center for Economic Ethics and Corporate Social Responsibility, Italy); Gianluca Grimalda (University of Duisburg-Essen, Centre for Global Cooperation Research and Kiel Institute for the World Economy, Germany; LEE-Universitat Jaume I of Castellón, Spain)
    Abstract: We investigate the effect of beliefs and preferences on trust and trustworthiness in the first experiment involving a stratified sample of association members and a demographically comparable sample of non-members. We show that: (1) Neither expectations on others’ behaviour nor risk aversion are relevant to account for members’ significantly higher trust and trustworthiness. Hence, members and non-members must differ in their basic preferences. (2) Expectations account for the lower trust and trustworthiness observed in Southern Italians compared to Northern Italians. This sheds light on two issues of main importance in the social capital literature.
    Keywords: Trust; Beliefs; Other-regarding preferences; Voluntary associations; Field experiment
    JEL: A13 C91 C93 D03
    Date: 2013
  4. By: Guido de Blasio (Banca d'Italia); Diego Scalise (Banca d'Italia); Paolo Sestito (Banca d'Italia)
    Abstract: Social scientists, in particular sociologists, claim that the distinction between universalistic and particularistic values is relevant to explaining the social behaviour of individuals (and societies). This paper provides preliminary empirical evidence that supports the claim. It first defines a number of proxies for the degree of particularism embedded into long-celebrated dimensions of social behaviour (trust, political awareness, and associational activities). Then, it shows that the particularistic measures are positively correlated to each other and negatively correlated to some established generalist measures for all dimensions of social behaviour considered, both across and within countries and regions. Moreover, the paper relates that the various proxies for particularism share the same set of covariates (such as low education and income), which are neatly distinguishable from the determinants of the generalist measures.
    Keywords: particularism, social capital
    JEL: A13 Z13
    Date: 2014–01
  5. By: Guglielmo Barone (Bank of Italy); Sauro Mocetti (Bank of Italy)
    Abstract: We examine the impact of natural disasters on GDP per capita by applying the synthetic control approach. Our analysis encompasses two large-scale earthquakes that occurred in two different Italian regions in 1976 and 1980. We show that the short-term effects are negligible in both regions, though they become negative if we simulate the GDP that would have been observed in absence of financial aid. In the long-term, our findings indicate a positive effect in one case and a negative effect in the other, largely reflecting divergent patterns of the TFP. Consistently with these findings, we offer further evidence suggesting that a quake and related financial aids might either increase technical efficiency via a disruptive creation mechanism or reduce it by stimulating corruption, distorting the markets and deteriorating social capital. We finally show that the bad outcome is more likely to occur in areas with lower pre-quake institutional quality. As a result, our evidence suggests that natural disasters are likely to exacerbate differences in economic and social development.
    Keywords: natural disasters, economic growth, aids, corruption, social capital, synthetic control approach
    JEL: R11 O40 H84 Q54
    Date: 2014–01
  6. By: Seth Freedman; Ginger Zhe Jin
    Abstract: We examine whether social networks facilitate online markets using data from a leading peer-to-peer lending website. Borrowers with social ties are consistently more likely to have their loans funded and receive lower interest rates. However, most social loans do not perform better ex post, except for loans with endorsements from friends contributing to the loan or loans with group characteristics most likely to provide screening and monitoring. We also find evidence of gaming on borrower participation in social networks. Overall, our findings suggest that return-maximizing lenders should be careful in interpreting social ties within the risky pool of social borrowers.
    JEL: D53 D82 L81
    Date: 2014–01
  7. By: Stoyanova, Alexandrina Petrova; Díaz Serrano, Lluís
    Abstract: An increasing body of research has pointed to the relevance of social capital in studying a great variety of socio-economic phenomena, ranging from economics growth and development to educational attainment and public health. Conceptually, our paper is framed within the debates about the possible links between health and social capital, on one hand, and within the hypotheses regarding the importance of social and community networks in all stages of the dynamics of international migration, on the other hand. Our primary objective is to explore the ways social relations contribute to health differences between the immigrants and the native-born population of Spain. We also try to reveal differences in the nature of the social networks of foreign-born, as compared to that of the native-born persons. The empirical analysis is based on an individual-level data coming from the 2006 Spanish Health Survey, which contains a representative sample of the immigrant population. To assess the relationship between various health indicators (self-assessed health, chronic conditions and long-term illness) and social capital, controlling for other covariates, we estimate multilevel models separately for the two population groups of interest. In the estimates we distinguish between individual and community-level social capital. While the Health Survey contains information that allows us to define individual social capital measures, the collective indicators come from other official sources. In particular, for the subsample of immigrants, we proxy community-level networks and relationships by variables contained in the Spanish National Survey of Immigrants 2007. The results obtained so far point to the relevance of social capital as a covariate in the health equation, although, the significance varies according to the specific health indicator used. Additionally, and contrary to what is expected, immigrants’ social networks seem to be inferior to those of the native-born population in many aspects; and they also affect immigrant’s health to a lesser extent. Policy implications of the findings are discussed. Keywords: health status, social capital, immigration, Spain
    Keywords: Estatus social, Salut pública, Capital social, Emigració i immigració, Espanya, 338 - Situació econòmica. Política econòmica. Gestió, control i planificació de l'economia. Producció. Serveis. Turisme. Preus,
    Date: 2013
  8. By: Bruno, Bruna; Fiorillo, Damiano
    Abstract: The effects of voluntary work on earnings have recently been studied for some developed countries such as Canada, France and Austria. This paper extends this line of research to Italy, using data from the European Union Statistics on Income and Living Conditions (EU-SILC) dataset. A double methodological approach is used in order to control for unobserved heterogeneity: Heckman and IV methods are employed to account for unobserved worker heterogeneity and endogeneity bias. Empirical results show that, when the unobserved heterogeneity is taken into account, a wage premium of 2.7 percent emerges, quite small if compared to previous investigations on Canada and Austria. The investigation into the channels of influence of volunteering on wages gives support to the hypotheses that volunteering enables the access to fruitful informal networks, avoids the human capital deterioration and provides a signal for intrinsically motivated individuals.
    Keywords: Voluntary work, wages, Mincer equation, selection bias, instrumental variables, Italy
    JEL: C31 C36 D64 J31 Z1
    Date: 2014–01
  9. By: Katherine Scrivens; Conal Smith
    Abstract: This paper looks beyond the broad notion of social capital – which has been applied to a number of different phenomena –in order to clarify (i) the range of different elements that are encompassed by the term; and (ii) what needs to be done to further statistical research and development in order to lay the groundwork for establishing guidelines for better comparative measures in the future. The paper starts by describing the origins of the concept of social capital and the evolution of different approaches in the literature on this subject: it argues that there is not one single interpretation of social capital but rather several different approaches, which need to be more clearly distinguished in order for research and measurement to advance. The paper identifies four main ways in which the concept of “social capital” has been conceptualised and measured -- i) personal relationships; ii) social network support; iii) civic engagement; and iv) trust and cooperative norms -- reflecting different views of what social capital ‘is’ and implying different research agendas. The paper then looks at each of these four area in turn, assessing their meaning, functionings, and areas of policy relevance. Finally, the paper looks at measurement issues, providing examples of the measures on each of the four areas from national and international surveys. Recommendations for further statistical work in the field of social capital measurement are supported by a database of the survey questions used in around 50 surveys worldwide, available at employée pour qualifier un nombre de phénomènes différents – afin de définir (i) l’ensemble des éléments qui sont inclus dans ce terme ; et (ii) la feuille de route à suivre pour poursuivre la recherche statistiques et développer les principes à suivre capables d’améliorer la comparabilité des indicateurs dans le futur. Dans une première partie, ce rapport s’attache à décrire les origines du concept de capital social et l’évolution de la littérature sur les différentes approches qui lui sont associées : ce papier démontre qu’il n’y a pas qu’une seule définition du capital social, mais plutôt différentes approches qui doivent être clairement distinguées dans une perspective de recherche et de mesure. Ce rapport identifie quatre directions dans lesquelles la notion de « capital social » a été conceptualisée et mesurée : i) les relations interpersonnelles ; ii) la qualité des liens sociaux, iii) l’engagement civique et iv) la confiance et les normes de coopérations. Cette grande diversité reflète la variété des approches sur ce qu’ « est » le capital social et implique différents programmes de recherche. Ce rapport détaille ensuite ces quatre approches en étudiant pour chacune d’elle, sa signification, son mode de fonctionnement et les champs d’action politique qui lui sont associés. Dans une dernière partie, ce document de travail s’intéresse aux questions de mesure pour chacune de ces approches en offrant des exemples de mesure tirés d’enquêtes nationales et internationales. Les recommandations proposées pour la poursuite des travaux statistiques s’appuient sur une base de données recueillant les questions d’une cinquantaine d’enquêtes réalisées dans le monde entier et qui est disponible sur and-question-databank.htm.
    Date: 2013–12–10
  10. By: Facchini, Giovanni (University of Nottingham); Patacchini, Eleonora (Syracuse University); Steinhardt, Max (Helmut Schmidt University, Hamburg)
    Abstract: Using novel information from the German Socio-Economic Panel for the period 1996-2011, we document that migrants with a German friend are more similar to natives than those without a local companion along several important dimensions, including engagement in social activities, concerns about the economy, interest in politics and broad policy issues like the environment, crime and xenophobia. When looking at the determinants of friendship acquisition, we find that the acquisition of a new job is the cause (rather than the product) of social network variations. Other factors driving the acquisition of a native friend include the number of years the migrant has spent in the country, the birth of a child, residential mobility and additional education in the host country.
    Keywords: culture, migration, friendship formation, ethnic minorities
    JEL: A14 J15 J61
    Date: 2014–01
  11. By: Catia Batista (Nova University of Lisbon); Gaia Narciso (Trinity College Dublin)
    Abstract: Do information flows matter for remittance behavior? We design and implement a randomized control trial to quantitatively assess the role of communication between migrants and their contacts abroad on the extent and value of remittance flows. In the experiment, a random sample of 1,500 migrants residing in Ireland was offered the possibility of contacting their networks outside the host country for free over a varying number of months. We find a sizable, positive impact of our intervention on the value of migrant remittances sent. Our results exclude that the remittance effect we identify is a simple substitution effect. Instead, our analysis points to this effect being a likely result of improved information via factors such as better migrant control over remittance use, enhanced trust in remittance channels due to experience sharing, or increased remittance recipients’ social pressure on migrants
    Keywords: information flows, international migration, migrant networks, remittances, randomized control trial
    JEL: F22 J61 O15
    Date: 2014–01
  12. By: Margherita Comola (Paris School of Economics (Université Paris 1 Panthéon-Sorbonne)); Mariapia Mendola (University of Milan Bicocca and Centro Studi Luca d’Agliano)
    Abstract: This paper provides the first direct evidence on the determinants of link formation among immigrants in the host society. We use a purposely-designed survey on a representative sample of Sri Lankan immigrants living in Milan to study how migrants form social links among them and the extent to which this network provides them material support along three different dimensions: accommodation, credit, job-finding. Our results show that both weak and strong ties are more likely to exist between immigrants who are born in close-by localities at origin. The time of arrival has a U-shaped effect: links are more frequent between immigrants arrived at the same time, and between long-established immigrants and newcomers. Once the link is formed, material support is provided mainly to relatives while early migrant fellows are helpful for job finding.
    Keywords: Migration, Networks, Sri-Lanka, Milan
    JEL: J15 D85 C45
    Date: 2013–06–10
  13. By: Erte Xiao (Department of Social and Decision Sciences Carnegie Mellon University); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)
    Abstract: We develop and model a two-stage incentivized intervention to promote pro-sociality. In the first stage, participants are incentivized to complete a compound task consisting of a targeted pro-social activity and a complement activity. In the second stage, participants are incentivized to complete repeatedly only the complement activity. The model predicts that, conditional on compliance with the first-stage compound task, intrinsic interest in the target activity is promoted regardless of compliance with the second-stage task. To test this we design and implement a field experiment on volunteering. The results are consistent with our model. Moreover, in the one year subsequent to our experiment, those who participated in our compound-task mechanism reported volunteering systematically more than those who participated in alternative mechanisms we investigated. Our approach has useful implications for promoting positive individual and social outcomes in many behavioral domains. Length: 41
    Keywords: volunteering, incentives, pro-social attitudes, cognitive dissonance, field experiment
    JEL: C93 D02 D03 D04 D64 H41 Z13
    Date: 2014–01
  14. By: Dos Santos Ferreira, Rodolphe (University of Strasbourg 3); Lloyd-Braga, Teresa (Católica Lisbon); Modesto, Leonor (Universidade Catolica Portuguesa, Lisbon)
    Abstract: We study employment dynamics using an OLG model with unemployment benefits and universal old-age survival pensions, both financed by taxing employed workers. The novelty is that we explicitly introduce workers' social norms that shape both the individual participation decision of workers and wage bargaining. We find that social norms increase the likelihood of multiplicity of equilibria and somewhat facilitate the emergence of indeterminacy and flip bifurcations, constituting therefore a source of business cycles driven by self-fulfilling volatile expectations, i.e. sunspots. We also find that, in the presence of strong social norms, standard policy recommendations that advocate a decrease in unemployment benefits in order to boost employment are no longer valid. Indeed, our simulation results show that the opposite will happen for empirically plausible levels of the unemployment rate.
    Keywords: flip bifurcations, local indeterminacy, steady state multiplicity, sunspots, workers' social norms, unemployment benefits
    JEL: E32 H23 H31 J65
    Date: 2014–01
  15. By: Elsner, Benjamin (IZA); Narciso, Gaia (Trinity College Dublin); Thijssen, Jacco J. J. (University of York)
    Abstract: Diaspora networks provide information to future migrants and influence both their decision to migrate and their success in the host country. While the existing literature explains the effect of networks on migration decisions through the size of the migrant community, we show that the quality of the network is an equally important determinant. We argue that networks that are more integrated in the society of the host country can give more accurate information about job prospects to future migrants. In a decision model with imperfect signalling we show that migrants with access to a better network are more likely to make the right decision – they migrate only if they gain – and they migrate earlier. We test these predictions empirically using data on recent Mexican migrants to the US, and exploit the geographic diffusion of Mexicans since the 1980s as well as the settlement of immigrants that came during the Bracero program in the 1950s to instrument for the quality of networks. The results provide strong evidence that connections to a better-integrated network lead to better outcomes after migration. Yet we find no evidence that the quality of the network affects the timing of migration.
    Keywords: diasporas, information, migration
    JEL: F22 J15 J61
    Date: 2013–12
  16. By: Christina Gravert (Department of Economics and Business, Aarhus University, Denmark)
    Abstract: I conduct a field experiment at a charitable bookstore to provide evidence for the role of identity under "pay-what-you-want pricing". When subtly reminded of their participation in the store's membership program members paid significantly more per book then without a reminder, while this nudge had no effect on non-members. Making an individual aware of its close social connection to the seller can thus, in a charitable setting, increase voluntarily paid prices.
    Keywords: Field experiment, Pay-What-You-Want, Charitable contributions, Identity
    JEL: C93 D03 D4 D64
    Date: 2014–01–14
  17. By: W. P. Weijland
    Abstract: This paper shows how we can build a model for transactions when goods are given away in the expectation of a later settlement. In settings where people keep track of their social accounts we are able to redefine concepts like account balance, yield curve and the law of diminishing returns. The model provides us with a result that expresses how people have a structural preference for one recipient over the other regardless the actual account balance. Hence a building block in the social fabric of a community. Finally, a fundamental theorem is presented to show how suppliers and recipients use their account balance in order to reach an equilibrium in the exchange of goods much like the traditional balance between supply and demand.
    Date: 2014–01

This nep-soc issue is ©2014 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.