nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2018‒07‒23
eleven papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Inequality, Fairness and Social Capital By Fehr, Dietmar; Rau, Hannes; Trautmann, Stefan T.; Xu, Yilong
  2. Blessed are the First: The Long-Term Effect of Birth Order on Trust. By Conzo, Pierluigi; Zotti, Roberto
  3. Understanding the Social and Cultural Bases of Brexit By Tak Wing Chan; Morag Henderson; Maria Sironi; Juta Kawalerowicz
  4. Does Limiting Internet Use Among Adolescents Affect their Offline Social relationships? By Mora Villarrubia, Ricardo; Li, Yunrong
  5. Trust and Delegated Investing: A Money Doctors Experiment By Germann, Maximilian; Loos, Benjamin; Weber, Martin
  6. Misperceived Social Norms: Female Labor Force Participation in Saudi Arabia By Leonardo Bursztyn; Alessandra L. González; David Yanagizawa-Drott
  7. Immigration, Housing Rents, and Residential Segregation: Evidence from Syrian Refugees in Turkey By Balkan, Binnur; Tok, Elif Ozcan; Torun, Huzeyfe; Tumen, Semih
  8. Media Coverage and Immigration Worries: Econometric Evidence By Christine Benesch; Simon Loretz; David Stadelmann; Tobias Thomas
  9. Diversity and Growth By Gradstein, Mark; Justman, Moshe
  10. Recovering social networks from panel data: identification, simulations and an application By Áureo de Paula; Imran Rasul; Pedro CL Souza
  11. Group Size Effect and Over-Punishment in the Case of Third Party Enforcement of Social Norms By Kenju Kamei

  1. By: Fehr, Dietmar; Rau, Hannes; Trautmann, Stefan T.; Xu, Yilong
    Abstract: We study the impact of unjust inequality on social trust and trustworthiness, and its separate effect on the economically successful and the unsuccessful, in a controlled economic experiment. We find evidence for a negative effect of unfair economic inequality on social interactions. Probing the boundaries of this effect, we document that this erosion of social capital critically depends on the context: if a well-off person is not directly responsible for the outcome of the worse-off person, then we observe no negative effects on trust and trustworthiness in the aggregate. Moreover, our data do not support the view that higher status or wealth leads to an erosion of pro-social attitudes: the successful are always more generous; groups of unsuccessful persons are least efficient and least generous in the trust game.
    Date: 2018–07–12
  2. By: Conzo, Pierluigi; Zotti, Roberto (University of Turin)
    Abstract: The renewed interest by the economic literature in the effect of birth order on children’s outcomes has neglected trust as a long-term output of familial environment. Acknowledging childhood as a crucial stage of life for the formation of social preferences, we go deeper into the early-life determinants of trust, a widely recognized driver of socio-economic success. We analyze if and how differences in the order of birth predict heterogeneous self-reported trust levels in Britain. We draw hypotheses from psychology, economics and sociology, and test alternative explanations to the association between birth order and trust. Relying on an index measuring birth order independently from sibship size, we find a negative and robust effect of birth order, with laterborns trusting less than their older siblings. This effect is not accounted for by personality traits, strength of family ties, risk aversion and parental inputs. It is only partially explained by complementary human-capital outcomes, and it is robust when we use alternative dependent variables and control for endogenous fertility. Multilevel estimates suggest that trust is mostly driven by within- rather than between-family characteristics. The effect of birth order is eclipsed by education outcomes only for women, while it is counterbalanced by mother’s education for the entire sample, thereby leading to relevant policy implications.
    Date: 2018–06
  3. By: Tak Wing Chan (Department of Social Science, UCL Institute of Education); Morag Henderson (Department of Social Science, UCL Institute of Education); Maria Sironi (Department of Social Science, UCL Institute of Education); Juta Kawalerowicz (Linkoping University)
    Abstract: We use data from a large scale and nationally representative survey to explore the social and cultural bases of Brexit. There are strong age and educational gradients in Brexit support. Net of individual characteristics, regional differences within England become insignificant. In fact, once local level of immigration is taken into account, people living in the English regions are less pro-Leave than Londoners. It is social status, not social class, which predicts Brexit support. Economic deprivation does not predict Brexit attitude. Individuals living in areas with a higher concentration of migrants are actually less pro-Brexit. But recent increase in immigration level has the opposite association. Individuals for whom being British is important are more likely to support Leave. But those who choose national identity over sub-national identity and those reporting omnivorous cultural consumption are less supportive of Brexit. Those who live in the county in which they were born are more pro-Leave, but those who have stronger ties with their neighbours and neighbourhood, and those who are more involved in civic associations are pro-Remain. Overall, our results do not support the 'left-behind' narrative of Brexit. Instead, we show a strong cultural dimension in Brexit support.
    Date: 2017–12–19
  4. By: Mora Villarrubia, Ricardo; Li, Yunrong
    Abstract: We use longitudinal individual data from a nationally representative sample of Chinese children aged 10 to 15 to investigate whether a partial ban on internet use affects offline social interactions among adolescents. We present both IV and mixed logit estimates and control for spillover effects and unobservable heterogeneity. Although online and offline relationships are strongly positively correlated, the existence of unobservable common tastes for social interactions at household level explains an important part of this correlation. We also find that (i) most children do reduce their offline social relationships when facing limits to their use of social networking sites; (ii) there are spillover effects in the sense that these negative effects increase with the size of the online local network; (iii) the negative effects are sizable and statistically significant for older children (aged 14 and 15); and (iv), for these older children, they occur even after discounting the network effect. To sum up, we find large negative effects on offline social relationships for older children even if the limits are imposed to all children simultaneously.
    Keywords: Online social relations; complementarity; unobservable common tastes
    JEL: J14 J13
    Date: 2018–07
  5. By: Germann, Maximilian; Loos, Benjamin; Weber, Martin
    Abstract: A recent theory by Gennaioli, Shleifer, and Vishny (2015) proposes that trust is an important component for delegated investing. This paper tests the theory in a laboratory experiment. Participants first play a trust game. Participants then act as investors who have to make two separate, delegated investment decisions. Using the amount returned in the trust game as measure of trustworthiness, we show that investors are willing to take substantially more risk when a money manager is more trustworthy, even if this manager charges higher costs. The willingness to take more risk and pay higher costs is increasing in the difference in trustworthiness of the two money managers. This finding is robust to different specifications of the difference in trustworthiness.
    Keywords: Investment Decision; Money Doctor; risk aversion; Trust
    JEL: G11 G23
    Date: 2018–06
  6. By: Leonardo Bursztyn (University of Chicago, Department of Economics); Alessandra L. González (The University of Chicago); David Yanagizawa-Drott (University of Zurich)
    Abstract: Through the custom of guardianship, husbands typically have the final word on their wives’ labor supply decisions in Saudi Arabia, a country with very low female labor force participation (FLFP). We provide incentivized evidence (both from an experimental sample in Riyadh and from a national sample) that the vast majority of young married men in Saudi Arabia privately support FLFP outside of home from a normative perspective, while they substantially underestimate the level of support for FLFP by other similar men – even men from their same social setting, such as their neighbors. We then show that randomly correcting these beliefs about others increases married men’s willingness to let their wives join the labor force (as measured by their costly sign-up for a job-matching service for their wives). Finally, we find that this decision maps onto real outcomes: four months after the main intervention, the wives of men in our original sample whose beliefs about acceptability of FLFP were corrected are more likely to have applied and interviewed for a job outside of home. Together, our evidence indicates a potentially important source of labor market frictions, where job search is underprovided due to misperceived social norms.
    Keywords: social norms, female labor force participation, Saudi Arabia
    JEL: C90 D83 D91 J22 Z10
    Date: 2018–07
  7. By: Balkan, Binnur (Central Bank of Turkey); Tok, Elif Ozcan (Central Bank of Turkey); Torun, Huzeyfe (Central Bank of Turkey); Tumen, Semih (TED University)
    Abstract: The massive inflow of Syrian refugees is argued to drastically affect various social and economic outcomes in the hosting countries and regions. In this paper, we use micro-level data to investigate whether the Syrian refugee inflows have affected the market for housing rentals in Turkey. The unexpected arrival of a large number of refugees due to civil conflict in Syria is used to construct a quasi-experimental design. Since the construction of new housing units takes a long time, refugee inflow resembles a positive demand shock to the sector. We find that the refugee inflows have led to an increase in the rents of higher-quality housing units, while there is no statistically significant effect in the rents of lower-quality units. This finding supports a residential segregation story, which suggests that the refugee wave has increased the demand for native-dominant neighborhoods with better amenities especially among natives. We argue that negative attitudes towards refugees – potentially due to refugee-native conflict along several dimensions – may be generating this result.
    Keywords: Syrian refugees, immigration, housing rents, quasi-experimental design, Turkey
    JEL: C21 F22 R21 R23
    Date: 2018–06
  8. By: Christine Benesch; Simon Loretz; David Stadelmann; Tobias Thomas
    Abstract: This paper empirically explores the link between mass media coverage of migration and immigration worries. Using detailed data on media coverage in Germany, we show that the amount of media reports regarding migration issues is positively associated with concerns about immigration among the German population. The association is robust to the inclusion of time-variant individual control variables and individual fixed-effects. We employ media spillovers from the neighboring country of Switzerland, which occur due to referendum decisions on immigration as an instrumental variable to address endogeneity concerns. The IV estimates suggest that media coverage has a causal impact on immigration worries. Exploring heterogeneous effects between respondents, the results reveal that the link between media reports and immigration worries is particularly relevant for women and respondents active in the workforce.
    Keywords: media, migration, news spillovers, political attitudes
    JEL: L8 D7 F2
    Date: 2018
  9. By: Gradstein, Mark (Ben Gurion University); Justman, Moshe (Ben Gurion University)
    Abstract: The diversity of social interaction within economic communities affects productivity and growth, and is itself shaped by economic conditions. These reciprocal effects raise the possibility of multiple equilibria, of setting a socially polarized economy stagnating in poverty on a new path of social integration and economic growth through external intervention or an internal political initiative. This paper describes a simple analytical model that captures these reciprocal effects, and sheds light on the role of government capacity, community leadership, federation and external credit or aid, in achieving economic growth through social integration.
    Keywords: cultural diversity, economic growth, social interaction
    JEL: O11 Z10 Z18
    Date: 2018–05
  10. By: Áureo de Paula (Institute for Fiscal Studies and University College London); Imran Rasul (Institute for Fiscal Studies and University College London and IFS); Pedro CL Souza (Institute for Fiscal Studies)
    Abstract: It is almost self-evident that social interactions can determine economic behavior and outcomes. Yet, information on social ties does not exist in most publicly available and widely used datasets. We present methods to recover information on the entire structure of social networks from observational panel data that contains no information on social ties between individuals. In the context of a canonical social interactions model, we provide sufficient conditions under which the social interactions matrix, endogenous and exogenous social effect parameters are all globally identified. We describe how high-dimensional estimation techniques can be used to estimate the model based on the Adaptive Elastic Net GMM method. We showcase our method in Monte Carlo simulations using two stylized and two real world network structures. Finally, we employ our method to study tax competition across US states. We find the identified network structure of tax competition differs markedly from the common assumption of tax competition between geographically neighboring states: the majority of geographic neighboring states (63%) are found not to be relevant for tax setting. We analyze the identified social interactions matrix to provide novel insights into the longstanding debate on the relative roles of factor mobility and yardstick competition in driving tax setting behavior across states. Most broadly, our method shows how the analysis of social interactions can be usefully extended to economic realms where no network data exists.
    JEL: C18 C31 D85 H71
    Date: 2018–03–02
  11. By: Kenju Kamei (Durham University Business School)
    Abstract: One of the important topics in public choice is how people’s free-riding behavior could differ by group size in collective action dilemmas. This paper experimentally studies how the strength of third party punishment in a prisoner’s dilemma could differ by the number of third parties in a group. Our data indicate that as the number of third party punishers increases in a group, the average punishment intensity per third party punisher decreases. However, the decrease rate is very mild and therefore the size of total punishment in a group substantially increases with an increase in group size. As a result, third party punishment becomes a sufficient deterrent against a player selecting defection in the prisoner’s dilemma when the number of third party punishers is sufficiently large. Nevertheless, when there are too many third party punishers in a group, a defector’s expected payoff is far lower than that of a cooperator due to strong aggregate punishment, while some cooperators are even hurt through punishment. Therefore, the group incurs a huge efficiency loss. Such over-punishment results from third party punishers’ conditional punishment behaviors: their punishment intensity is positively correlated with their beliefs on the peers’ punitive actions. Some possible ways to coordinate punishment among peers even when group size is very large, thus enabling the efficiency loss to be mitigated, are also discussed in the paper.
    Keywords: experiment, cooperation, third party punishment, dilemma, group size effect
    JEL: C92 D72 D78 H41
    Date: 2018–04

This nep-soc issue is ©2018 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.