nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2014‒12‒19
eight papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. The Relevance of Social Norms for Economic Efficiency: Theory and its Empirical Test By Anil Alpman
  2. Homophily, Group Size, and the Diffusion of Political Information in Social Networks: Evidence from Twitter By Yosh Halberstam; Brian Knight
  3. Leaders as Role Models for the Voluntary Provision of Public Goods By Gächter, Simon; Renner, Elke
  4. Love thy neighbor: Religion and prosocial behavior By Heineck, Guido
  5. Improving voluntary public good provision by a non-governmental, endogenous matching mechanism: Experimental evidence By Reif, Christiane; Rübbelke, Dirk; Löschel, Andreas
  6. Social Networks and Health Knowledge in India: Who You Know or Who You Are? By Niels-Hugo Blunch; Nabanita Datta Gupta
  7. The role of social networks in an imperfect market for agricultural technology products: Evidence on Bt cotton adoption in Pakistan By Ma, Xingliang; Spielman, David J.; Nazli, Hina; Zambrano, Patricia; Zaidi, Fatima; Kouser, Shahzad
  8. Trust, trust attitudes and group participation in rural development activities By Peralta, M. Alexandra; Shupp, Robert

  1. By: Anil Alpman (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: This paper proposes a new formulation of the theory of social norms. The theoretical model explores the interrelation between individuals' income, time-use and consumption decisions on the one hand, and the determinants of their decision to conform or not to social norms on the other. It is shown that rational consumers will obey inefficient social norms, which in turn will slow economic development. An empirical test of the model is performed for different categories of countries using a voluminous cross-country micro dataset. The results yield the gain and the cost of disobeying inefficient social norms, the latter of which can be used as a freedom indicator regarding social pressure.
    Keywords: Consumer theory; social norms; social interactions; household production model; economic efficiency
    Date: 2013–04
  2. By: Yosh Halberstam; Brian Knight
    Abstract: In this paper, we investigate political communications in social networks characterized both by homophily–a tendency to associate with similar individuals–and group size. To generate testable hypotheses, we develop a simple theory of information diffusion in social networks with homophily and two groups: conservatives and liberals. The model predicts that, with homophily, members of the majority group have more network connections and are exposed to more information than the minority group. We also use the model to show that, with homophily and a tendency to produce like-minded information, groups are disproportionately exposed to like-minded information and the information reaches like-minded individuals more quickly than it reaches individuals of opposing ideologies. To test the hypotheses of our model, we analyze nearly 500,000 communications during the 2012 US elections in a social network of 2.2 million politically-engaged Twitter users. Consistent with the model, we find that members of the majority group in each state-level network have more connections and are exposed to more tweets than members of the minority group. Likewise, we find that groups are disproportionately exposed to like-minded information and that information reaches like-minded users more quickly than users of the opposing ideology.
    JEL: D7 D8
    Date: 2014–11
  3. By: Gächter, Simon (University of Nottingham); Renner, Elke (University of Nottingham)
    Abstract: We investigate the link between leadership, beliefs and pro-social behavior. This link is interesting because field evidence suggests that people's behavior in domains like charitable giving, tax evasion, corporate culture and corruption is influenced by leaders (CEOs, politicians) and beliefs about others' behavior. Our framework is an experimental public goods game with a leader. We find that leaders strongly shape their followers' initial beliefs and contributions. In later rounds, followers put more weight on other followers' past behavior than on the leader's current action. This creates a path dependency the leader can hardly correct. We discuss the implications for understanding belief effects in naturally occurring situations.
    Keywords: leadership, beliefs, experiments, public goods, path dependency, public policy, management
    JEL: C72 C90 H41 Z13
    Date: 2014–10
  4. By: Heineck, Guido
    Abstract: There is a long tradition in psychology, the social sciences and, more recently though, economics to hypothesize that religion enhances prosocial behavior. Evidence from both survey and experimental data however yield mixed results and there is barely any evidence for Germany. This study adds to this literature by exploring data from the German Socio-Economic Panel (SOEP), which provides both attitudinal (importance of helping others, of being socially active) and behavioral components of prosociality (volunteering, charitable giving and blood donations). Results from analyses that avoid issues of reverse causality suggest mainly for moderate, positive effects of individuals' religious involvement as measured by church affiliation and church attendance. Despite the historic divide in religion, results in West and East Germany do not differ substantially.
    Keywords: Religion,prosocial behavior,Germany
    JEL: D64 Z12 Z13
    Date: 2014
  5. By: Reif, Christiane; Rübbelke, Dirk; Löschel, Andreas
    Abstract: Social norms can help to foster cooperation and to overcome the free-rider problem in private provision of public goods. This paper focuses on the enforcement of social norms by a selfintroduced punishment and reward scheme. We analyse if subjects achieve to implement a normenforcement mechanism at their own expense by applying the theory of non-governmental normenforcement by Buchholz et al. (2014) in a laboratory experiment. Based on their theory without central authority and endogenously determined enforcement mechanism, we implement a twostage public good game: At the first stage subjects determine the strength of penalty/reward on their own and in the second stage they decide on their contributions to the public good. We find that the mechanism by Buchholz et al. (2014) leads to a higher public good contribution than without the use of any mechanism. Only in a few cases groups end up with a zero enforcement mechanism. This result indicates that subjects are apparently willing to contribute funds for implementing an enforcement mechanism. Moreover, higher enforcement parameters lead to higher public good contributions in the second stage, although too high enforcement parameters lead to unreachable theoretical optima.
    Keywords: laboratory experiment,public good,matching mechanism,social norms,norm enforcement
    JEL: H41 C92
    Date: 2014
  6. By: Niels-Hugo Blunch (Washington and Lee University & IZA); Nabanita Datta Gupta (Department of Economics and Business, Aarhus University, Denmark)
    Abstract: Addressing several methodological shortcomings of the previous literature, this paper explores the relationship among health knowledge and caste and religion and a number of important mediating factors in India, estimating causal impacts through a combination of instrumental variables and matching methods. The results indicate the presence of a substantively large caste and religion health knowledge gap in the context of proper treatment of diarrhea in children favoring high caste women relative to low caste and Muslim women. We also provide evidence that while observed individual characteristics such as education and access to social networks explain part of the gap, a substantial part of the health knowledge gap is left unexplained. All groups have greater health knowledge in urban than in rural areas, but the gap is even wider in urban than in rural areas. Additionally, high caste women benefit more in terms of health knowledge from having health networks than women from other groups; except if the health person is of the same caste/religion, in which case low caste and Muslim women sometimes benefit by as much as double that of high caste women, or even more. It may therefore not be enough to give individuals access to high quality networks if caste and religion-related gaps in health knowledge are to be reduced; such networks also have to be homophilous, to have the maximum effect. Improved treatment from and confidence in the medical profession is found to be part of the mechanism linking health social network formation with improved health knowledge about the treatment of diarrhea in children.
    Keywords: Health knowledge, caste, religion, social networks, India
    JEL: I12 I14 I15
    Date: 2014–10–27
  7. By: Ma, Xingliang; Spielman, David J.; Nazli, Hina; Zambrano, Patricia; Zaidi, Fatima; Kouser, Shahzad
    Abstract: Social networks play an important role in generating learning externalities that can drive the diffusion of innovative, and potentially poverty-reducing, technologies. This is particularly the case in developing countries where rural education, extension, and agricultural information services are underprovided. The recent introduction of genetically modified insect-resistant Bt (Bacillus thuringiensis) cotton in Pakistan represents an example where imperfect markets, weak extension services, and information asymmetries limit the ability of farmers to make informed decisions on how to take best advantage of the technology. This study explores the role of social networks and learning externalities in the adoption of Bt cotton in Pakistan. We model how information from social network members influences farmers’ adoption decisions, controlling for farmers’ characteristics, cotton growing conditions, and other possible information sources. We apply our model to a representative sample of 728 cotton-growing households randomly selected in 2012-13 from 52 villages across Punjab and Sindh. We also assess the role of input dealers, progressive farmers, public extension agents, and farmers’ individual characteristics in the uptake of the technology. Results suggest that communication within social networks helps disseminate information about Bt cotton cultivation and has encouraged its adoption.
    Keywords: social networks, Bt cotton, Pakistan, technology adoption, Agricultural and Food Policy, Community/Rural/Urban Development, Institutional and Behavioral Economics, International Development, Research and Development/Tech Change/Emerging Technologies,
    Date: 2014
  8. By: Peralta, M. Alexandra; Shupp, Robert
    Abstract: Development projects frequently use the strategy of group formation to promote project interventions such as producer groups and savings and lending groups. These groups are formed and encouraged by development projects for two primary reasons: 1) because the success of the intervention in some way relies on group participation and cooperation (e.g., savings and lending groups or sustainable management of a resource), or 2) because groups make it easier to disseminate the intervention and possibly improve its effectiveness via information sharing among participants. But for groups to be formed, high levels of trust and trustworthdiness among group members are considered a requirement. Implying that more trusting/trustworthy community members selfselect into forming these groups. However, it is also possible that the frequent interaction among group participants lead to higher levels of trust and cooperation. Then the question becomes whether group-based interventions take advantage of the social capital and social ties already existing in the communities or improves it. We apply the trust game to investigate whether farmers involved in group-based interventions promoted by a rural development project in Nicaragua, “Agriculture for Basic Needs” (A4N), reveal different levels of trust than farmers who were not exposed to the A4N group interventions. The A4N program, data and methods. The overarching strategy for the A4N project was to promote group organization and interaction, to build capacity in saving and lending, to introduce enhanced agricultural technologies, and provide technical assistance to farmers. As such, farmers in the A4N villages were invited and encouraged to form groups focused on one or more of the following project-supported objectives: saving and lending, learning sustainable agricultural technologies, and innovation and learning. We apply the trust game and survey questions to investigate whether farmers involved in group-based interventions promoted by A4N reveal different levels of trust than farmers who did not participate in the A4N group interventions. We explore these effects on trust levels among farmers in the same village. To achieve this objective, our experimental design involves two treatments that vary only in whether participants were involved in the A4N project or not. Specifically, we implement trust experiments in eight communities in Nicaragua – half of these communities where involved in the A4N project while the other half were not. Eight A4N and non-A4N villages were selected such that they had similar socio-economic characteristics, and selected A4N villages that had more than one A4N group with the goal of avoiding only having participants from a single group in a given session. A total of eight sessions – one session in each village – were conducted during May of 2012 with between 17 and 22 farmers participating in each session, for a total of 153 participants. For sessions in A4N villages, farmer-participants were recruited randomly from lists of farmers participating in groups promoted and supported by the A4N project. Similarly, for sessions in non-A4N villages, farmer-participants were chosen randomly from lists of farmers with similar demographic characteristics to the A4N farmers. This version of the trust game is a one-shot game, with no communication where all participants remain anonymous in that they do not know whom they are playing with. As in most trust games, participants are divided into two types – senders and receivers – and each sender is paired with one receiver. In addition, both senders and receivers are given equal initial endowments. The sender is then asked to decide what portion of their endowment they would like to send to the receiver. The sender can send all or none and knows that whatever portion they do not send they will get to keep. The sender – and receiver – also knows that the amount sent (or invested) is, in this case, tripled before it is given to the receiver. The receiver will now have their endowment plus three times what the sender sent. In the second step of the game, the receiver can return some amount of what they have (endowment plus three times what the sender sent) back to the sender. Discussion and results On average, A4N and non-A4N subjects do not differ in most socioeconomic characteristics, implying that both A4N and non-A4N participants were drawn from the same population. However, these two groups do differ in terms of gender, besides having invited a similar proportion of men and women to the meeting, more women participated in the A4N sections than men. The results suggest that A4N senders sent more than non-A4N senders, A4N sent 51% of their endowment, whereas non-A4N senders sent 46% (p-value=0.10 Mann-Whitney U test for equal means). However when we conduct multivariate analysis including socioeconomic characteristics, the difference becomes not statistically significant. In particular, the variable for gender (male=1) is negative and statistically significant, suggesting that women are more trusting than men. The results also suggest that they are there were not difference in trustworthiness. A4N receivers returned 32% of their available resources, and non-A4N receivers returned 35% (p-value=0.30 Mann-Whitney U test for equal means). In the multivariate analysis the proportion returned is explained by the amount sent, socioeconomic characteristics were not statistically significant. This results contrast with other studies that have found that subjects in a group are more trusting. Indicating that not necessarily more trusting individuals self-select to participate in groups. Particularly in the case of a rural development project is possible that the motivation of obtaining project benefits encouraged group formation. However it is also possible that group formation encourages trust and social capital formation, and further research on this should be carried out.
    Keywords: Community/Rural/Urban Development, Institutional and Behavioral Economics, International Development,
    Date: 2014–05–28

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.
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