nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2015‒08‒01
eleven papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Can social interactions change the brain? Social network effects on obesity and related co-morbidities By Henning, Christian H.C.A.; Zarnekow, Nana; Laudes, Matthias
  2. Nice Neighborhood or Network Capital: What drives Residential Quality of Life? By Zarnekow, Nana; Henning, Christian H.C.A.
  3. Some determinants of trust formation and pro social behaviours in investment games: An experimental study By Di Bartolomeo Giovanni; Papa Stefano
  4. Conditional Cooperation and Betrayal Aversion By Robin Cubitt; Simon Gaechter; Simone Quercia
  5. When Do Punishment Institutions Work? By Patrick Aquino; Robert S. Gazzale; Sarah Jacobson
  6. Feedback, Social Nudges, and Energy Conservation By Hunter, Elizabeth; Crago, Christine; Spraggon, John
  7. Promoting Peru’s Smallholder Farmer’s Access to Profitable Markets: The Effects of Social Networks and Farmer Training By Salas, Vania B.; Fan, Qin
  8. Precautionary Intentions and Risk Perceptions: Empirical Evidence from the Victims of Typhoon Morakot By Chou, Wan-Jung; Huang, Yu-Chia; Chang, Ching-Cheng
  9. Trust in the LEADER approach: the case study of the Veneto region in Italy By Pisani, Elena; Franceschetti, G.; Secco, L.; Da Re, R.
  10. Does Social Capital Explain Small Business Resilience? A Panel Data Analysis Post-Katrina By Torres, Ariana P.; Marshall, Maria I.
  11. Getting a Leg Up or Pulling it Down? Interpersonal Comparisons and Destructive Actions: Experimental Evidence from Bolivia By Zeballos, Eliana

  1. By: Henning, Christian H.C.A.; Zarnekow, Nana; Laudes, Matthias
    Abstract: The aim of the present study was to examine to what extend different social network mechanisms are factors explaining the spread of obesity and obesity associated co-morbidities. Based on our theoretical framework we derive testable hypotheses regarding an indirect and direct impact of social networks on EGO’s BMI and insulin resistance. To test our hypotheses we undertook a clinical and social survey including a sample of 1397 probands. Collected data include anthropometric and biochemical measures as well as health attitudes, behavioural and socio-economic variables and social network data. We used nonparametric and parametric regression models to analyse whether EGO’s BMI and insulin resistance are determined by EGO’s social network characteristics controlling for EGO’s individual characteristics. We found significant PSM and GPS treatment effects for high sport activities, a frequent diet behaviour (p=0.000) of EGO’s social peer group. Since our regression analyses results that obesity is the main determinant of the HOMA-index this established a significant indirect network effect on insulin resistance. We also found significant direct social network effects on EGO’s insulin resistance, i.e. controlling for EGO’s obesity status frequent diet behaviour (p=0.033) and sport activities (p=0.041) of EGO’s peer group decreases EGO’s HOMA index. Network phenomena appear not only to be relevant for the spread of obesity, but also for the spread of associated co-morbidities.
    Keywords: Social network, obesity, peer group effects, generalized matching method, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Institutional and Behavioral Economics,
    Date: 2015–05
  2. By: Zarnekow, Nana; Henning, Christian H.C.A.
    Keywords: social network, quality of life, latent class estimation, Community/Rural/Urban Development, Institutional and Behavioral Economics,
    Date: 2015–05
  3. By: Di Bartolomeo Giovanni; Papa Stefano
    Date: 2014–09
  4. By: Robin Cubitt (Department of Economics, University of Nottingham); Simon Gaechter (Department of Economics, University of Nottingham); Simone Quercia (University of Bonn, Institute for Applied Microeconomics)
    Abstract: We investigate whether there is a link between conditional cooperation and betrayal aversion. We use a public goods game to classify subjects by type of contribution preference and by belief about the contributions of others; and we measure betrayal aversion for different categories of subject. We find that, among conditional cooperators, only those who expect others to contribute little to the public good are significantly betrayal averse, while there is no evidence of betrayal aversion for those who expect substantial contributions by others. This is consistent with their social risk taking in public goods games, as the pessimistic conditional cooperators tend to avoid contribution to avoid exploitation, whereas the optimistic ones typically contribute to the public good and thus take the social risk of being exploited.
    Keywords: public goods game, conditional cooperation, trust, betrayal aversion, exploitation aversion, free riding, experiments
    Date: 2015
  5. By: Patrick Aquino (Harvard Graduate School of Education); Robert S. Gazzale (University of Toronto); Sarah Jacobson (Williams College)
    Abstract: The public good literature has often found that a punishment option increases cooperation while the gift exchange literature has found the opposite. We use a novel experiment to seek the cause of this difference. We begin with a gift exchange game with punishment as it has typically been implemented therein, and modify two features to replicate conditions more like those usually used in a public good game: punishment's power and its timing (whether the punisher publicly pre-commits to punishment before the punishee decides or acts after the punishee). We replicate the result that punishment institutions as they have typically been implemented in gift exchange games "backfire," but show that this bad outcome disappears if punishment is more powerful. We find three reasons that punishment decreases cooperation: lower wages are offered (a stick is substituted for a carrot); punishment is poorly chosen by many punishers; and some agents spitefully choose low cooperation in retribution against a punishing principal, but only if the punishment is weak so that spite is relatively cheap. We find that punishment that is not publicly pre-committed to is not effective in this game, even though this kind of punishment is similar to that used in many public good games in the literature where punishment does seem to increase cooperation. The only punishment institution that increases cooperation is high-power punishment that is publicly pre-committed to. Finally, the existence of a punishment institution often decreases social surplus (when punishment-related losses are considered), although it may eventually increase social surplus if it is powerful and publicly pre-committed to.
    Keywords: punishment, cooperation, reciprocity, gift exchange, public good
    JEL: C91 D03 D64 H41 J41
    Date: 2015–07
  6. By: Hunter, Elizabeth; Crago, Christine; Spraggon, John
    Abstract: In the context of climate change and heightened concerns about our energy future, academics and policy makers have taken an interest in the different motivational factors influencing individuals’ energy use. One area of particular interest is the role of information and other non-financial motivators: When traditional financial incentives are not appropriate, can contextualized information programs be used to encourage energy conservation? In our research we conduct an experiment to examine the effect of feedback and social nudges on the energy consumption of renters in utility-inclusive contracts. A sample of 64 households at a University of Massachusetts Amherst family housing complex was selected to participate in this experiment. These residents pay utility-inclusive rent and previously had no means of gaining access to information regarding their personal energy consumption. Households were randomly divided into a control and two treatment groups. During the first phase of the experiment, both treatment groups received weekly Home Energy Reports [HERs] with feedback pertaining to their electricity consumption and its associated financial cost. During the second phase of the experiment both treatment groups continued to receive these HERs as before but with one distinction: households in one of the treatment groups received additional information as to how their electricity consumption compared to the electricity consumption of others in the complex (a social nudge). Analysis of this experiment suggests that feedback on own electricity usage reduced electricity consumption on average by 1.9%, while the social nudge increased electricity consumption by 3.6%. Further investigation into the cause of this positive effect on electricity consumption from social contextualization reveals that this figure was driven by low-consumers of electricity, who subsequently increased their electricity consumption upon receiving the social nudge.
    Keywords: energy efficiency, energy conservation, social nudge, social norms, feedback, field experiment, boomerang effect, split incentives, Resource /Energy Economics and Policy,
    Date: 2015
  7. By: Salas, Vania B.; Fan, Qin
    Keywords: International Development,
    Date: 2015
  8. By: Chou, Wan-Jung; Huang, Yu-Chia; Chang, Ching-Cheng
    Abstract: It has been widely considered that when faced with natural hazard risks in the future, people adopt precautionary measures in order to alleviate the impact of a hazardous event. This study used the data from the Household Survey of Post-Morakot Social Impact and Recovery-Wave 1 implemented in June, 2010 in Taiwan via face to face interview with the representatives of the households that were forced to relocate after the typhoon. The raw data contains 1658 observations, representing 1658 households. Based on a two-stage approach, we, in the first stage, investigate the determinants of three types of households’ risk perceptions for the future, respectively, with the following explanatory variables: one’s experience with disaster with damage incurred, one’s trust in the authorities as well as local communities regarding their capacity of emergency response, one’s socio-demographic backgrounds and one’s residential areas. In the second stage, we assess the power of previously investigated risk perceptions, as well as of other factors, in explaining households’ intention to adopt measures for preparedness, for mitigation and for recovery, respectively. Subject to the categorical characteristics of dependent variables, an ordered probit model was employed. Our estimation results confirm the association between precautionary behaviour taken before Morakot and households risk perceptions after typhoon Morakot. However, it is inconclusive regarding whether or not former actions could reduce risk perceptions in a later stage. A negative correlation between trust in the central government and perceived impact of property loss is observed which suggests that the central government’s emergency response takes effect on reducing the damage on property. In comparison, households with higher trust in local communities tend to have lower perceived likelihood of a typhoon disaster. The corresponding predicted values confirmed that majority of the sampled households have high or very high risk perceptions. Households’ socio-demographic background and the locations of their residency are related to risk perceptions, primarily perceived probability and impact on property. The extent to which one trusts the central government and local communities in their disaster response capacity explains his/her intention to take precautionary actions. These results imply that households’ trust in the central government indicates their dependency on the government and hence results in weaker intention to take self-protect actions. Furthermore, households who trust in local communities do not consider that it is the communities’ responsibility to take protection measures and being part of the communities, they recognise the necessity of precautionary actions at the community level. Furthermore, we found that excessive compensation is correlated with weaker intention to purchase property insurance but a similar effect is not observed with respect to the intention to take up insurance against personal accidents. This can be explained by the fact that the authorities offered to the households affected by typhoon Morakot a financial compensation package that had extensive coverage on flooded or damaged housing and this can disincentivize households to purchase property insurance. Finally, the results confirm that certain predictors have both direct and indirect effects on the intentions to take certain precautionary measures, when indirect effects are mediated by risk perceptions. These predictors include trust in the central government for preparedness and mitigation, trust in local communicates for preparedness, mitigation and recovery, age for preparedness measures, income and illiteracy for mitigation measures and ethnicity for recovery measures. Moreover, the direct and indirect effects in some cases can counteract with each other. Thus if risk communication is to be sought in order to promote households’ precautionary behaviour against typhoon hazards, not only the information about the possibility and potential impact associated with a hazard but also households’ attitudes and socio-demographic factors ought to be taken into account in the development of communication strategies.
    Keywords: Household, precautionary behaviour/intention, risk perception, typhoon disaster, trust, Institutional and Behavioral Economics, Risk and Uncertainty,
    Date: 2015–05–27
  9. By: Pisani, Elena; Franceschetti, G.; Secco, L.; Da Re, R.
    Abstract: The paper presents a methodology for the assessment of interpersonal and institutional trust measured at the level of Local Action Groups of the LEADER Approach and based on the use of indicators and on Social Network Analysis (SNA). From the theoretical point of view, the indicators can be used in longitudinal studies to assess if the relation between individual trust and social networks is verified with regard to specific organizations promoting rural development at local level. From the operative point of view, the indicators of trust represent a useful and relative simple instrument to be used in the monitoring and evaluation activities of the LEADER Approach.
    Keywords: Trust, LEADER Approach, Social Network Analysis, Monitoring and Evaluation, Community/Rural/Urban Development, Research and Development/Tech Change/Emerging Technologies, O22, O18,
    Date: 2014–06
  10. By: Torres, Ariana P.; Marshall, Maria I.
    Abstract: How small businesses fare after a natural disaster and what it takes for them to survive is very important to the economy because they employ approximately half of America’s private workforce (SBA, 2013) and are a critical component of and major contributor to the vitality of cities, states, and the country (Cochrane, 1992; Robbins, 2001). It is widely known that small businesses tend to feel greater economic repercussions after natural disasters when compared to larger businesses (Schrank et al., 2013). Following a disaster, a business can be closed or remain operating, but this status varies with time and depends on the business’ vulnerability or its level of resilience (Alesch, 2003; Cutter, 2008), especially after considering that small business owners are hit twice by disasters: as business owners and as local citizens (Runyan, 2006). Post-disaster resilience is a multidimensional and complex process that takes place over time, is related to the rebuilding of the life of individuals, businesses, communities, and institutions, and is strongly influenced by the interaction of the agents that are affected by a disaster (Chang, 2010; Olshansky, 2005). Aldrich (2012) illustrated how social capital—networks that formally or informally offer resources—explains the ability to withstand a disaster and build resilience by quickly disseminating information and financial and physical assistance within a community. This study takes a step further and aims to understand how social capital explains the resilience of small businesses after Hurricane Katrina. Most studies have focused mainly on the macroeconomic impacts of disasters using aggregated data and have lightly addressed small business resilience using the business as the unit of analysis (Zhang et al., 2008; Aldrich, 2012). Although the aggregated analysis is useful to understand the effects of disasters on the recovery of businesses, it does not shed light on the how and why of the resilience process. This study uses the Small Business Disaster Recovery Framework (SBDRF) to assess how social capital explains the resilience of small businesses hit by Hurricane Katrina (Marshall and Schrank, 2014). Based on the SBDRF, post-disaster operating businesses were categorized as closed, survived, recovered, and resilient depending on the comparison between pre- and post-disaster indicators (Marshall and Schrank, 2014). After a disaster, a business can be closed or open, and for those businesses that are can be classified as survived, recover, or resilient. The SBDRF categorizes operating business as survived as those that have not reached pre-event levels, a recovered business has return to its pre-disaster state, and a resilient business has exceeded the baseline performance pre-disaster (Bruneau et al., 2003; Marshall and Schrank, 2014). A panel regression was used with the level of gross revenues pre- and post-Katrina as dependent variables (2004, 2011, and 2013). To assess the level of post-disaster business resilience this study used quantitative (e.g. gross revenues comparisons) and qualitative indicators (owner’s perceptions of success). The methodology addresses the assumptions that 1) simultaneity between resilience, recovery, and survival can create possible endogeneity, and 2) the status of the business as open or closed may involve a non-random sample selection. Business owner’s perceptions are key for studies on small businesses and these tend to be ignored if research and conclusions are drawn only from simulation models or aggregated data. This study addresses the lack of a finer measurement of social capital in economic and social studies by incorporating multiple categories of the key independent variable, social capital, such as bonding (support received from similar individuals such as family and friends), bridging (support received from dissimilar individuals such as communities), and linking (support received from institutions) (Aldrich, 2012; Hawkins and Maurer, 2010). This study incorporated several control variables at the community, family, and small business level often included in small and family business studies. For instance, this study included control variables for human capital, financial capital, location, a county socioeconomic vulnerability index, a rurality index, and demographic variables of the business and business’ owner that can affect the operation of the business after disaster. The data for this study comes from the first and second wave of the Small Business Survival and Demise after a Natural Disaster Project (SBSD). This data set is unique because it includes information about both open and closed businesses at different points in time and allows us to determine the differences to those that remained operating. The primary sampling unit within the model is the small business, which was defined as those that had 0-200 employees and were headquartered in the state of Mississippi. Of the 2,610 business owners reached, the cooperation rate was 19.12% providing a random sample size of 499 businesses. Preliminary results show that from the 420 small business used in this study, 11.90% of the business are closed and 88.10% are operating. From those operating, the majority have survived and only 18.81% have recovered and 25.00% are resilient. The results suggest that few business are resilient or even recovered. Small business that received social capital were significantly more likely to be operating after Katrina and the probability of being resilient significantly increases with the level of social capital. For instance, small businesses are 23.95%, 28.57%, and 21.35% (at P<0.001) more likely to be resilient when they received support from family and friends, the community, or institutions, respectively. In addition, the results suggest that linking is the most effective type of social capital to build small business resilience. This study bridges the gap existing between the impact of natural disaster and small businesses to analyze how social capital explains business resilience. Two main questions were answered. First, does social capital explain small business resilience after Hurricane Katrina? Second, what is the most effective type of social capital for building small business resilience? The results illustrate how small business owners, especially those who lack physical and financial resources, connected to their communities and forming part of tighter local networks can overcome disaster and build resilience. The more links business owners have to the community, families, friends, and institutions (i.e. the more social capital they have), the better off they will be when they go through a crisis; therefore, self-reliance only cannot assure post-disaster recovery. This study shows that social capital, sources of information and assistance during crisis, should be taken into account as another tangible asset for mitigation and recovery. Finally, scholars, planners, and government agencies can use these results to advocate for increasing social capital by incorporating incentives and interventions to support the creation and strengthening of bonds between citizens and local social networks through community participation and leadership development.
    Keywords: Katrina, social capital, resilience, small business, Community/Rural/Urban Development, Consumer/Household Economics, Environmental Economics and Policy,
    Date: 2015
  11. By: Zeballos, Eliana
    Abstract: Sometimes people, when comparing themselves with others, take a host of actions that are destructive to those around them, even when these actions imply self-inflicted costs. "Pulling down" other more successful individuals may have both direct and indirect detrimental effects on productivity and efficiency. On one hand, welfare is reduced directly as output is destroyed, and indirectly if their threat induces ex-ante behavioral responses in the form of lower levels of effort and investment. Consequently, linking reactions to upward social comparisons and their effect on effort levels may help explain the considerable variability in how people have been shown to react to such comparisons. In this paper, I develop a two-stage, two-agent model of strategic behavior that integrates the role of inter-personal comparisons with conventional neoclassical economic preference theory to analyze how interpersonal comparisons lead to destructive behavior and affect levels of effort. The experiment, designed to test the predictions of the model and tease out the mechanisms that drive destructive behavior, builds on the two-stage "money burning" game. The experimental games were carried out in Bolivia among 285 dairy farmers. Results show that people that were above the within-group mean, in average exert less effort when comparing themselves with others (the "guilt" case); while people below the within-group mean exert more effort (the "keep-up-with-the-Joneses" case). People who fear the envy of others decrease their effort exerted, specially if they are highly ranked. Results from the money burning game show that people below the mean took in average more destructive behavior than people above the mean. Of all the participants, 55% took at least one destructive action against somebody in their group reducing their output by 34%. People seem to be averse to disadvantageous inequalities, but not averse to advantageous inequalities. Moreover, people destroy less the bigger the advantageous difference is but destroy more in the oposite case.
    Keywords: Interpersonal comparisons, Destructive behavior, Envy, Equity, Equality, Institutional and Behavioral Economics, D01, D03, D63,
    Date: 2015

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