nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2017‒10‒08
twelve papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Incarcerate one to calm the others? Spillover effects of incarceration among criminal groups By Philippe, Arnaud
  2. The Strength of Absent Ties: Social Integration via Online Dating By Josue Ortega; Philipp Hergovich
  3. Institutional shocks and economic outcomes : Allende's election, Pinochet's coup and the Santiago stock market By Daniele Girardi; Samuel Bowles
  4. The limits to moral erosion in markets: social norms and the replacement excuse By Björn Bartling; Yagiz Özdemir
  5. Word of Mouth Communication and Search By Campbell, Arthur; Leister, Matthew; Zenou, Yves
  6. Entitlements and Loyalty in Groups: An Experimental Study By Paetzel, Fabian; Sausgruber, Rupert
  7. Bonds and bridges, and between: An empirical analysis of group-based trust By Stephany, Fabian; Braesemann, Fabian
  8. Distributions of Centrality on Networks By Krishna Dasaratha
  9. Estimation of Peer Effects in Endogenous Social Networks: Control Function Approach By Ida Johnsson; Hyungsik Roger Moon
  10. Social Capital and Mental Health in Indonesia By Mohamad Fahmi; Adiatma Siregar; Deni K Sunjaya; Gilang Amarullah; Rahma Rahma; Nur Afni Panjaitan
  11. Culture, Diffusion, and Economic Development: The Problem of Observational Equivalence By Ani Harutyunyan; Ömer Özak
  12. "Relation between Civic Attitudes, Generalized and Institutional Trust in Six Regions of the Russian Federation" By Svetlana Maximova

  1. By: Philippe, Arnaud
    Abstract: This paper documents the effect of peers’ incarceration on an individual’s criminal activity within small criminal groups. Using established criminal groups, I built a 48-month panel that records the criminal status, Individual imprisonment status and imprisonment status of group members. Panel regressions with individual fixed effects allows me to document five facts. First, the incarceration of a peer is associated with a 5 per cent decrease in the arrest rate among groups composed of two persons. No effect is observed among bigger groups. Second, this effect is present even for incarceration following lone crimes, ruling out an explanation based on common shocks. Third, the probability of committing a group crime strongly decreases, and there is no shift to crime with other peers or lone crimes. Four, this general effect hides significant within-group heterogeneity. The results are consistent with the idea that ‘leaders’ are not affected by the incarceration of ‘followers’. Five, the effect seems to be driven by lower risky behaviour among offenders who remain free, and not by ‘criminal capital’ loss or deterrence.
    Date: 2017–09
  2. By: Josue Ortega; Philipp Hergovich
    Abstract: We used to marry people to which we were somehow connected to: friends of friends, schoolmates, neighbours. Since we were more connected to people similar to us, we were likely to marry someone from our own race. However, online dating has changed this pattern: people who meet online tend to be complete strangers. Given that one-third of modern marriages start online, we investigate theoretically, using random graphs and matching theory, the effects of those previously absent ties in the diversity of modern societies. We find that when a society benefits from previously absent ties, social integration occurs rapidly, even if the number of partners met online is small. Our findings are consistent with the sharp increase in interracial marriages in the U.S. in the last two decades.
    Date: 2017–09
  3. By: Daniele Girardi (University of Massachusetts Amherst); Samuel Bowles (Santa Fe Institute)
    Abstract: To study the effect of political and institutional changes on the economy, we look at share prices in the Santiago exchange during the tumultuous political events that characterized Chile in the early 1970s. We use a transparent empirical strategy, deploying previously unused daily data and exploiting two largely unexpected shocks which involved substantial variation in policies and institutions, providing a rare natural experiment. Allende's election and subsequent socialist experiment decreased share values, while the military coup and dictatorship that replaced him boosted them, in both cases by magnitudes unprecedented in the literature.
    Keywords: institutional shocks, natural experiment, share prices, Chile, socialism, military coup, elections
    JEL: P00 P16 D02 E02 N2
    Date: 2017
  4. By: Björn Bartling; Yagiz Özdemir
    Abstract: This paper studies the impact of a key feature of competitive markets on moral behavior: the possibility that a competitor will step in and conclude the deal if a conscientious market actor forgoes a profitable business opportunity for ethical reasons. We study experimentally whether people employ the argument "if I don’t do it, someone else will" to justify taking a narrowly self-interested action. Our data reveal a clear pattern. Subjects do not employ the "replacement excuse" if a social norm exists that classifies the selfish action as immoral. But if no social norm exists, subjects are more inclined to take a selfish action in situations where another subject can otherwise take it. By demonstrating the importance of social norms of moral behavior for limiting the power of the replacement excuse, our paper informs the long-standing debate on the effect of markets on morals.
    Keywords: Replacement excuse, social norms, moral behavior, competition, markets, utilitarianism, deontological ethics
    JEL: C92 D02 D63
    Date: 2017–09
  5. By: Campbell, Arthur; Leister, Matthew; Zenou, Yves
    Abstract: In many economic contexts, the most credible source of information about the quality of products is one's friends. In this paper, we develop a word-of-mouth model of search for an experience good where the quality is unknown. We find the characteristics of the social net-work that result in exclusively low quality, a mixture of qualities and exclusively high-quality products. When consumer search is costly, an exclusively high-quality equilibrium is not possible. Moreover, markets may become stuck in a low-quality equilibrium when equilibria with better quality are possible. Market inefficiencies are characterized by an under-investment in friends and a market's misallocation of low-quality firms.
    Keywords: giant component; inefficiencies; search; Social Networks
    JEL: D83 D85 L15
    Date: 2017–09
  6. By: Paetzel, Fabian; Sausgruber, Rupert
    Abstract: We study loyalty in groups that are exogenously assigned based on members' performances in a task. We observe that in-group bias is strong and significant among subjects who score high in performance, and that it is weak and insignificant among those who score low. This asymmetric pattern is mirrored in the punishment of disloyal subjects within groups. The results are consistent with an explanation according to which fairness judgments depend on entitlement considerations and provide a new perspective on theory and empirical research that argues that group identity increases with the status of the group.
    Keywords: entitlements,fairness,group loyalty,status,punishment,social norms,minimal groups
    JEL: C92 D31 D63
    Date: 2017
  7. By: Stephany, Fabian; Braesemann, Fabian
    Abstract: Social capital is often represented by generalized trust - the degree to which one trusts "most (unknown) people". It is assumed to be enhanced by diverse group interactions. In the social capital literature, it is opposed by particularized trust, which represents our mutual confidence in individuals close to us, for example, family members and friends. This study, based on a survey with 634 university students from Austria, questions the existing dichotomy between the two trust types. Our results advocate in favour of a third, community determined type of trust. This additional trust dimension is measured by the number of groups the individuals participate in. It changes between particularized and generalized trust, depending on measures of group context, like frequency of interaction or group size. Thus, the results support hypotheses made in the recent literature about the multidimensionality of trust and quantify the effect of group participation on trust.
    Keywords: Generalized Trust,Networks,Social Capital,Panel Data,Instrumental Variables
    JEL: C36 C93 D70 Z13
    Date: 2017
  8. By: Krishna Dasaratha
    Abstract: In many social and economic networks, agents' outcomes depend substantially on the centrality of their network position. Our current understanding of network centrality is largely restricted to deterministic settings, but in many applications data limitations or theoretical concerns lead practitioners to use random network models. We provide a foundation for understanding how central agents in random networks are likely to be. Our main theorems show that on large random networks, centrality measures are close to their expected values with high probability. By applying these theorems to stochastic block models, we study how segregated networks contribute to inequality. When networks are segregated, benefits from peer effects tend to accrue unevenly to the advantage of more central individuals and groups. We also discuss applications to more general network formation models, including models where link probabilities are governed by geography.
    Date: 2017–09
  9. By: Ida Johnsson; Hyungsik Roger Moon
    Abstract: We propose a method of estimating the linear-in-means model of peer effects in which the peer group, defined by a social network, is endogenous in the outcome equation for peer effects. Endogeneity is due to unobservable individual characteristics that influence both link formation in the network and the outcome of interest. We propose two estimators of the peer effect equation that control for the endogeneity of the social connections using a control function approach. We leave the functional form of the control function unspecified and treat it as unknown. To estimate the model, we use a sieve semiparametric approach, and we establish asymptotics of the semiparametric estimator.
    Date: 2017–09
  10. By: Mohamad Fahmi (Department of Economics, Padjadjaran University); Adiatma Siregar (Department of Economics, Padjadjaran University); Deni K Sunjaya (Department of Public Health, Padjadjaran University); Gilang Amarullah (Department of Economics, Padjadjaran University); Rahma Rahma (Department of Economics, Padjadjaran University); Nur Afni Panjaitan (Department of Economics, Padjadjaran University)
    Abstract: Mental health is the integral part of overall health. Despite the importance of mental health, most health policy are directed for physical, while mental issues left behind.The similar pattern is also happen in Indonesia. This paper aim to examine the impact of social capital to individual mental health. We utilize IFLS 2014 database since it provide comprehensive information on mental health as well as social capital. Mental health is represented by self-reported of depression CESD-R-10 scale. Social capital represented by social trust in individual and community level as well as participation in community. The research using mixed level regression model method with number of observation 28,257 respondents. We also incorporated control variable such as age, gender, marital status, working status, household size, income, and education. Result of the study showed that social trust and participation in community has no significant contribution to depression. On the other hand, control variables such as being older, male, and married associated with lower probability of depression.
    Keywords: social capital, mental health, Indonesia
    JEL: I0
    Date: 2017–09
  11. By: Ani Harutyunyan (LICOS - Centre for Institutions and Economic Performance at KU Leuven); Ömer Özak (Southern Methodist University)
    Abstract: This research explores the direct and barrier effects of culture on economic development. It shows both theoretically and empirically that whenever the technological frontier is at the top or bottom of the world distribution of a cultural value, there exists an observational equivalence between absolute cultural distances and cultural distances relative to the frontier, preventing the identification of its direct and barrier effects. Since the technological frontier usually has the ``right'' cultural values for development, it tends to be in the extremes of the distribution of cultural traits, generating observational equivalence and confounding the analysis. These results highlight the difficulty of disentangling the direct and barrier effects of culture. The empirical analysis finds suggestive evidence for direct effects of individualism and conformity with hierarchy, and barrier effects of hedonism.
    Keywords: Comparative economic development, cultural differences, barriers to technological diffusion, individualism, power distance, vertical hierarchy, hedonism, linguistic distance
    JEL: O10 O11 O20 O33 O40 O47 O57 Z10
    Date: 2017–04
  12. By: Svetlana Maximova (Altai State University, Russian Federation Author-2-Name: Maxim Maximov Author-2-Workplace-Name: Altai State University, Russian Federation Author-3-Name: Oksana Noyanzina Author-3-Workplace-Name: Altai State University, Russian Federation Author-4-Name: Daria Omelchenko Author-4-Workplace-Name: Altai State University, Russian Federation Author-5-Name: "Natalia Goncharova" Author-5-Workplace-Name: Altai State University, Russian Federation Author-6-Name: Anastasiia Morkovkina Author-6-Workplace-Name: "Lomonosov Moscow State University, Russian Federation ")
    Abstract: "Objective – The article presents an analysis of the relationship between generalized and institutional trust indicators and manifestation of civic representations, attitudes and behaviour in six Russian regions: Altai, Jewish Autonomous region, Trans-Baikal, Kemerovo, Omsk and Orenburg regions. Methodology/Technique – The data collected in 2015 from multistage stratified sample 2400 respondents and their age from 18 to 70 years. Findings – Among the studied regions, the highest levels of both interpersonal trust and confidence in social institutions were founded in the Jewish Autonomous Region, the lowest trust levels for many government entities and non-profit organizations are in the Trans-Baikal Territory, the Kemerovo Region and the Omsk region. The levels of civic participation are higher in regions with higher levels of trust. Novelty – The study suggests that trust, both interpersonal and institutional, are a factor in the development of civil society."
    Keywords: "Trust; Generalized Trust, Institutional Trust; Civic Attitudes; Civic Engagement; Civic Responsibility; NonProfit Organizations; Regions of Russian Federation. "
    JEL: Z13 Z18
    Date: 2017–03–12

This nep-soc issue is ©2017 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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