nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2014‒11‒22
eleven papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Trust Us to Repay: Social Trust, Long-Term Interest Rates and Sovereign Credit Ratings By Bergh, Andreas
  2. E-participation: Social Capital and the Internet By Fabio Sabatini; Francesco Sarracino
  3. Legitimacy and the Cost of Government By Berggren, Niclas; Bjørnskov, Christian; Lipka, David
  4. A Quantitative Study of Social Capital in the Tertiary Sector of Kobe : Has Social Capital Promoted Economic Reconstruction Since the Great Hanshin Awaji Earthquake? By Shimada, Go
  5. Predictable and Predictive Emotions: Explaining Cheap Signals and Trust Re-Extension By Schniter, Eric; Sheremeta, Roman
  6. Workers' health and social relations in Italy By Fiorillo, Damiano
  7. Who do you lie to? Social identity and the cost of lying By Christoph Feldhaus; Johannes Mans
  8. Innovation at Rural Enterprises: Results from a Survey of German Organic and Conventional Farmers By Unay Gailhard, ilkay; Bavorova, Miroslava
  9. Investigating the Sensitivity of Household Food Security to Agriculture-related Shocks and the Implication of Informal Social Capital and Natural Resource Capital: The Case of Rural Households in Mpumalanga, South Africa By Byela Tibesigwa, Martine Visser and Wayne Twine
  10. Dishonesty under scrutiny By Jeroen van de Ven; Marie Claire Villeval
  11. Cultural Diversity and Cultural Distance as Choice Determinants of Migration Destination By Zhiling Wang; Thomas de Graaff; Peter Nijkamp

  1. By: Bergh, Andreas (Research Institute of Industrial Economics (IFN))
    Abstract: This paper asks whether the sensitivity of market long-term interest rates and credit ratings is associated with cross-country differences in informal institutions, measured by social trust. We note a number of theoretical mechanisms that could imply that similar objective problems are more likely to be effectively dealt with in higher-trust societies. A set of panel estimates across middle and high-income countries reveal that interest rates and ratings are substantially more sensitive to inflation and growth problems in low-trust countries. This finding sheds light on the differential market reactions to economic problems in seemingly comparable countries.
    Keywords: Trust; Credit ratings; Interest rates; Economic reforms
    JEL: A13 G12
    Date: 2014–09–03
  2. By: Fabio Sabatini (Department of Economics and Law, Sapienza University of Rome (Italy) and Laboratory for Comparative Social Research (LCSR), National Research University Higher School of Economics, Moscow and Saint Petersburg (Russia)); Francesco Sarracino (Institut National de la Statistique et des Études Économiques du Grand-Duché du Luxembourg (STATEC), Laboratory for Comparative Social Research (LCSR), National Research University Higher School of Economics, Moscow and Saint Petersburg (Russia))
    Abstract: Studies in the social capital literature have documented two stylised facts: first, a decline in measures of social participation has occurred in many OECD countries. Second, and more recently, the success of social networking sites (SNSs) has resulted in a steep rise in online social participation. Our study adds to this body of research by conducting the first empirical assessment of how online networking affects two economically relevant aspects of social capital, i.e. trust and sociability. We address endogeneity in online networking by exploiting technological characteristics of the pre-existing voice telecommunication infrastructures that exogenously determined the availability of broadband for high-speed Internet. We find that participation in SNSs such as Facebook and Twitter has a positive effect on face-to-face interactions. However, social trust decreases with online interactions. We argue that the rising practice of hate speech may play a crucial role in the destruction of trust
    Keywords: Social Participation, Online Networks, Facebook, Social Trust, Social Capital, Broadband, Digital Divide, Hate Speech
    JEL: C36 D85 O33 Z1
    Date: 2014–10
  3. By: Berggren, Niclas (Research Institute of Industrial Economics (IFN)); Bjørnskov, Christian (Department of Economics and Business); Lipka, David (School of International Relations and Diplomacy)
    Abstract: While previous research documents a negative relationship between government size and economic growth, suggesting an economic cost of big government, a given government size generally affects growth differently in different countries. As a possible explanation of this differential effect, we explore whether perceived government legitimacy (measured by satisfaction with the way democracy works) influences how a certain government size affects growth. On the positive side, a legitimate government may “get away” with being big since legitimacy can affect people’s behavioral response to, and therefore the economic growth cost of, taxation and government expenditures. On the negative side, legitimacy may make voters less prone to acquire information, which in turn facilitates interest-group oriented or populist policies that harm growth. A panel-data analysis of up to 30 developed countries, in which two different measures of the size of government are interacted with government legitimacy, reveals that legitimacy exacerbates a negative growth effect of government size in the long run. This could be interpreted as governments taking advantage of legitimacy in order to secure short-term support at a long-term cost to the economy.
    Keywords: Legitimacy; Economic growth; Size of government; Confidence; Trust
    JEL: E62 H11 H20 O43 Z13
    Date: 2014–10–30
  4. By: Shimada, Go
    Abstract: Social capital is thought to have both positive and negative aspects. This paper examines how social capital has worked in the process of recovery and reconstruction in Kobe since the Great Hanshin Awaji Earthquake. The paper focuses on the tertiary sector of Kobe because since the earthquake there has been a structural shift from the secondary sector due to the damage caused by the earthquake, and because the sector accounted for 80% of employment, the most important factor for reconstruction in the mid- and long-term. The paper proves that both bonding and bridging social capital are important factors for employment. This finding provides empirical evidence for the on-going debate on how to rebuild Tohoku.
    Keywords: Social capital , SMEs (Small Medium Enterprises) , Natural disasters , Panel data analysis , Kobe
    Date: 2014–03–05
  5. By: Schniter, Eric; Sheremeta, Roman
    Abstract: Despite normative predictions from economics and biology, unrelated strangers will often develop the trust necessary to reap gains from one-shot economic exchange opportunities. This appears to be especially true when declared intentions and emotions can be cheaply communicated. Perhaps even more puzzling to economists and biologists is the observation that anonymous and unrelated individuals, known to have breached trust, often make effective use of cheap signals, such as promises and apologies, to encourage trust re-extension. We used a pair of trust games with one-way communication and an emotion survey to investigate the role of emotions in regulating the propensity to message, apologize, re-extend trust, and demonstrate trustworthiness. This design allowed us to observe the endogenous emergence and natural distribution of trust-relevant behaviors, remedial strategies used by promise-breakers, their effects on behavior, and subsequent outcomes. We found that emotions triggered by interaction outcomes are predictable and also predict subsequent apology and trust re-extension. The role of emotions in behavioral regulation helps explain why messages are produced, when they can be trusted, and when trust will be re-extended.
    Keywords: emotion, cheap signal, promise, apology, trust game, reciprocity, experiment
    JEL: C9 C91 C92
    Date: 2014–10–15
  6. By: Fiorillo, Damiano
    Abstract: The paper investigates whether social relations are associated with the health of workers after controlling for demographic and worker characteristics, housing features, neighbourhood quality, size of municipality and regional dummies. We consider two level of social relationships: i) individual social relations that we proxy by the frequency of meetings with friends, and; ii) contextual social relations, the average frequency with which people meet friends at the community level. A Heckman selection model is estimated from the worker sample, employing both self-reported and objective health measures using new data from an income and living conditions survey carried out in 2006 by the Italian Statistics Office (IT-SILC). Results show that social relations at the individual level are positively correlated with self-perceived health, negatively associated with chronic condition but not related to limitations in daily activities. Contextual social relations are negatively linked with chronic condition and limitations in daily activities but not correlated with self-perceived health.
    Keywords: Self-perceived health, chronic condition, limitations in daily activities, social relations, income, work conditions, Italy.
    JEL: C35 I12 I18 Z10
    Date: 2014–09
  7. By: Christoph Feldhaus; Johannes Mans
    Abstract: We investigate whether and how an individuals' propensity to lie is affected by the social relationship between a potential liar and her/his possible victim. We argue that a shared social identity of sender and receiver increases sender's aversion to lie by raising two types of costs: the allocative and the social costs of the lie. Allocative costs should be larger in ingroup interactions because social preferences are stronger and thus losses to the receiver are weighted more heavily while social costs should be higher in closer relationships due to stricter moral rules. In contrast to our hypothesis our experimental results from a modified three-person sender-receiver game do not provide evidence that social identity affects lying behavior. While across all treatments about half of the participants send a dishonest message, we do not observe differences in lying behavior towards ingroup and outgroup members: neither with respect to allocative nor in terms of social costs. Hence, in our experiment lying behavior is robust to social identity manipulations.
    Keywords: Private information, deception, lying costs, social identity, experiment
    JEL: C91 D82
    Date: 2014–09–01
  8. By: Unay Gailhard, ilkay; Bavorova, Miroslava
    Abstract: The purpose of this study is to examine the influence of interpersonal networks and other information sources on the innovativeness of farmers. This understanding can be useful for organizations that are involved in extension work that aims to increase the farmers’ innovativeness and for farmers who aim to be more innovative. The study focuses on two types of farmers’ network ties: friendship ties (ties to other farmers) and affiliation ties (ties to associations). Additionally, the importance of information gathered by farmers from interpersonal sources and from media is compared. We collected data within the European Union (EU)-funded Food Industry Dynamics and Methodological Advances (FOODIMA) Project using face-to-face interviews. Our sample, which consists of 72 farmers (organic and conventional) in Germany, was used to map farmers’ innovativeness (number of innovations adopted). We analyzed the data to determine if the structure and strength of network ties can be used as predictors of innovativeness for organic and conventional farmers. When considering both the friendship and affiliation ties, the main results show that organic farmers who communicate more frequently with other farmers are more likely to be highly innovative. The large network size indicates low innovativeness on the part of organic farmers. Membership in at least one association is positively interconnected with high innovativeness of conventional farmers. Regarding information sources, the results indicate that the highly innovative farmers appreciate information from research institutes more and information from agricultural organization less than the less innovative farmers.
    Keywords: Innovativeness; Social network ties; Communication frequency; Information sources; Organic and conventional farmers
    JEL: Q5 Q55 Q57 R14
    Date: 2014
  9. By: Byela Tibesigwa, Martine Visser and Wayne Twine
    Abstract: Resource-poor rural South Africa is characterised by high human densities due to the historic settlement patterns imposed by apartheid, high levels of poverty, under-developed markets and substantially high food insecurity. This chronic food insecurity combined with climate and weather variability has led to the adoption of less conventional adaptation methods in resource-poor rural settings. This paper examines the impact of agriculture-related shocks on the consumption patterns of rural households. In our assessment we are particularly interested in the interplay between social capital (both formal and informal), natural resource capital and agriculture-related shocks. We use three years of data from a relatively new and unique panel of households from rural Mpumalanga Province, South Africa, who rely on small-scale homestead farming. Overall we make two key observations. First, the agriculture-related shocks (i.e. crop failure from poor rainfall and hailstorm) reduce households’ food availability and thus consumption. Second, natural resource capital (e.g. bushmeat, edible wild fruits, vegetables and insects) and informal social capital (ability to ask for food assistance from neighbours, friends and relatives) somewhat counteracts this reduction and sustains households dietary requirements. In general, our findings suggest the promotion of informal social capital and natural resource capital as they are easier, cheaper and more accessible coping strategies, in comparison to other more technical and capital-intensive strategies such as insurance, which remain unaffordable in most rural parts of sub-Saharan Africa. However, a lingering concern centers on the sustainability of these adaptation strategies.
    Keywords: agriculture-related shocks, caloric consumption, natural resource capital, informal social capital, formal social capital, weather-related crop failure, small-scale-subsistence farming households
    JEL: Q1 Q5
    Date: 2014
  10. By: Jeroen van de Ven (ACLE (University of Amsterdam) and Tinbergen Institute. Address: Valckeniersstraat 65-67, 1018 XE Amsterdam, The Netherlands); Marie Claire Villeval (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France)
    Abstract: We investigate how different forms of scrutiny affect dishonesty, using Gneezy’s (2005) deception game. We add a third player whose interests are aligned with those of the sender. We find that lying behavior is not sensitive to revealing the sender’s identity to the observer. The option for observers to communicate with the sender, and the option to reveal the sender’s lies to the receiver also do not affect lying behavior. Even more striking, senders whose identity is revealed to their observer do not lie less when their interests are misaligned with those of the observer.
    Keywords: Deception, lies, dishonesty, social image, experiment
    JEL: C91 D83
    Date: 2014
  11. By: Zhiling Wang; Thomas de Graaff; Peter Nijkamp (VU University Amsterdam)
    Abstract: This study analyses the impact of cultural composition on regional attractiveness from the perspective of migrant sorting behaviour. We use an attitudinal survey to quantify cultural distances between natives and immigrants in the area concerned, and estimate the migrants’ varying preferences for both cultural diversity and cultural distance. To account for regional unobserved heterogeneity, our econometric analysis employs artificial instrumental variables, as developed by Bayer et al. (2004). The main conclusions are twofold. On the one hand, cultural diversity increases regional attractiveness. On the other hand, average cultural distance greatly weakens regional attractiveness, even when the presence of network effect is controlled for.
    Keywords: migration, cultural diversity, cultural distance, destination choice, sorting
    JEL: R2 Z1
    Date: 2014–06–02

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