In this issue we feature 9 current papers on the theme of social capital:

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In this issue we have:

1. Heterogeneous Motives in the Trust Game: A Tale of Two Roles - Espín, Antonio M.; Exadaktylos, Filippos; Neyse, Levent
2. Social Ties and the Job Search of Recent Immigrants - Goel, Deepti; Lang, Kevin
3. De Gustibus Non Est Disputandum revisited: The influence of social networks and health status on preferences for functional food - Henning, Christian; Zubek, Nana
4. Liberation Technology: Mobile Phones and Political Mobilization in Africa - Marco Manacorda; Andrea Tesei
5. For God's sake. The impact of religious proximity on firms' exports - Alessia Lo Turco; Daniela MAGGIONI
6. Groups, Norms and Endogenous Membership: Towards a Socially Inclusive Economics - Raul V. Fabella
7. The Family Peer Effect on Mothers' Labour Supply - Nicoletti, Cheti; Salvanes, Kjell G.; Tominey, Emma
8. Homophily and Transitivity in Dynamic Network Formation - Bryan S. Graham
9. Getting ahead or falling behind? – The importance of households’ ability to manage idiosyncratic risk in rural Ghana - Naschold, Felix

1. Heterogeneous Motives in the Trust Game: A Tale of Two Roles

   Espín, Antonio M.

   Exadaktylos, Filippos

   Neyse, Levent

 Trustful and trustworthy behaviors have important externalities for the  society. But what exactly drives people to behave in a trustful and  trustworthy manner? Building on research suggesting that individuals’ social  preferences might be a common factor informing both behaviors, we study the  impact of a set of different motives on individuals’ choices in a dual-role  Trust Game (TG). We employ data from a large-scale representative experiment  (N = 774), where all subjects played both roles of a binary TG with real  monetary incentives. Subjects’ social motives were inferred using their  decisions in a Dictator Game and a dual-role Ultimatum Game. Next to  self-interest and strategic motives we consider preferences for altruism,  spitefulness, egalitarianism, and efficiency. We demonstrate that there  exists considerable heterogeneity in motives in the TG. Most importantly,  among individuals who choose to trust as trustors, social motives can differ  dramatically as there is a non-negligible proportion of them who seem to act  out of (strategic) self-interest whereas others are driven more by efficiency  considerations. Subjects’ elicited trustworthiness, however, can be used to  infer such motivations: while the former are not trustworthy as trustees, the  latter are. We discuss that research on trust can benefit from adding the  second player’s choice in TG designs.

   Keywords: trust game,dictator game,ultimatum game,social preferences,self-interest

URL: http://d.repec.org/n?u=RePEc:zbw:ifwkie:141321&r=soc

2. Social Ties and the Job Search of Recent Immigrants

   Goel, Deepti (Delhi School of Economics)

   Lang, Kevin (Boston University)

 In this paper we highlight a specific mechanism through which social networks  help in job search. We characterize the strength of a network by its  likelihood of providing a job offer. Using a theoretical model we show that  the wage differential in jobs found using networks versus those found using  formal channels, decreases as the network becomes stronger. We verify this  result for recent immigrants to Canada for whom a strong network is captured  by the presence of a 'close tie.' Furthermore, structural estimates confirm  that the presence of a close tie operates by increasing the likelihood of  generating a job offer from the network rather than by altering the wage  distribution from which an offer is drawn.

   Keywords: job search, migration, networks

   JEL: J3

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9942&r=soc

3. De Gustibus Non Est Disputandum revisited: The influence of social networks and health status on preferences for functional food

   Henning, Christian

   Zubek, Nana

 Combining the new consumer theory of Becker with a network model of belief  formation developed in sociology we derive a theory of peer group influence  on households' consumer beliefs regarding the impact of health related  attributes on households utility and hence on households' willingness to pay  for functional food. In particular, our theory implies peer group effects on  households' preferences for functional food, while following the famous  De-Gustibus-Non-Est-Disputandum paradigm of Bekcer and Stigler our theory  implies no peer group effects on households z-good preferences, e.g. WTP for  health, taste or convenience as nutrition related z-goods. Using own unique  social and medical survey data of 2000 probands, the KIK-panel (Kieler-  Interventions-Kohorte), collected within the Focus-project in Germany during  the years 2012 and 2013 we test our theory applying a two-stage latent class  estimation of macro and micro food preferences. In particular, the approach  allows a statistical testing of the impact of peer group network effects on  consumer beliefs, preferences and nutrition behavior. Central results are (i)  estimation confirming our theory implying significant peer group effects on  consumer beliefs and implied WTP for functional food attributes; (ii)  however, we also found significant peer group effects on z-good preferences  which contradicts the De-Gustibus-Non-Est-Disputandum paradigm. (iii)  accordingly we offer a modified new consumer theory allowing for peer group  effects on z-good preferences. At a practical level, our results have  interesting implications for specific marketing strategies promoting demand  for functional food as well as for specific political communication  strategies preventing nutrition based morbidities and thus promoting public  health.

Keywords: peer group effects, Consumer beliefs, social networks, functional foods, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Institutional and Behavioral Economics,

URL: http://d.repec.org/n?u=RePEc:ags:aaea16:235917&r=soc

4. Liberation Technology: Mobile Phones and Political Mobilization in Africa

   Marco Manacorda (Queen Mary University of London, CEP (LSE), CEPR & IZA)

   Andrea Tesei (Queen Mary University of London and CEP (LSE))  Can digital information and communication technology (ICT) foster mass  political mobilization? We use a novel geo-referenced dataset for the entire  African continent between 1998 and 2012 on the coverage of mobile phone  signal together with geo-referenced data from multiple sources on the  occurrence of protests and on individual participation in protests to bring  this argument to empirical scrutiny. We find that mobile phones are  instrumental to mass mobilization during economic downturns, when reasons for  grievance emerge and the cost of participation falls. Estimated effects are  if anything larger once we use an instrumental variable approach that relies  on differential trends in coverage across areas with different incidence of  lightning strikes. The results are in line with insights from a network model  with imperfect information and strategic complementarities in protest  provision. Mobile phones make individuals more responsive to both changes in  economic conditions - a mechanism that we ascribe to enhanced information -  and to their neighbors’ participation - a mechanism that we ascribe to  enhanced coordination. Empirically both effects are at play, highlighting the  channels through which digital ICT can alleviate the collective action  problem.

   Keywords: mobile phones, collective action, Africa, geo-referenced data

   JEL: D70 O55 L96

URL: http://d.repec.org/n?u=RePEc:hic:wpaper:217&r=soc

5. For God's sake. The impact of religious proximity on firms' exports

   Alessia Lo Turco (Università Politecnica delle Marche, Dipartimento di

    Scienze Economiche e Sociali)

   Daniela MAGGIONI (Università di Catania, Department of Political Sciences)  Using a rich firm level data set for Turkish manufacturing, we test whether  the sharing of similar religious beliefs with potential contracting parties  drives a firm.s first time entry in export markets. We exploit variation in  the practice of Islam across Turkish provinces andwe find that firms located  in provinces characterised by stronger religiousness are more likely to enter  export destinations with a higher share ofMuslims among their population.

 This result is robust to the control for trade, cultural and migration ties,  reverse causality and to several further sensitivity checks. Religious  proximity, in particular, eases export entry for producers of "trust  intensive" goods and mitigates the role of export experience in subsequent  foreign market entries. All in all, our evidence hints at the important role  of religious proximity in reducing export entry sunk costs by fostering  higher trust among contracting parties.

   Keywords: Islam, export entry, uncertainty, cultural distance

   JEL: F14 F11 D22 D80 N30

URL: http://d.repec.org/n?u=RePEc:anc:wpaper:418&r=soc

6. Groups, Norms and Endogenous Membership: Towards a Socially Inclusive Economics

   Raul V. Fabella (School of Economics, University of the Philippines Diliman)  In Part I, we argue that Economics must outgrow the narrow confines of  Neo-Classical Economics to embrace ‘sociality’ first championed by Herbert  Simon in the mid-1950s and now by a growing number of economists under the  banner of Social Economics. We contend here that Neo-Classical Economics is  incomplete, rather than wrong. Firstly any alternative model must subsume the  Neo-Classical model as a special case even as it embraces conceptual  promontories from other social science disciplines, viz., groups, norms and  sanctions. Secondly, it must be couched in a language familiar to the  economics profession? maintain optimizing behavior and equilibrium analysis.

 In Part II, we construct a formal model where the agent is at once a private  entity and a member of a social group; his utility is inclusive combining the  agent’s private utility over goods (the Neo-Classical utility) and the  utility the he derives from being a member, viz., access to group’s  collective good. As a member, he commits to support the procurement of the  group’s collective good and submits to a system of norms and to the  corresponding self-organized sanctions regime punishing violation of group  norms. The agent solves a sequence of optimization problems: the first  determines his optimal consumption basket given his budget constraint (net of  group contribution), prices in the market location of the group; this gives  his inclusive indirect utility; the second determines his optimal market  hours by maximizing his indirect inclusive utility subject to time constraint  and the market wage rate; this gives his doubly indirect inclusive utility;  thirdly, he maximizes his inclusive doubly indirect utility with respect to  the monetary contribution of the group given the sanctions for norm  violation. The choice of social group follows from a rank order of groups by  greatest inclusive utility an agent can attain in each competing social  group. Finally, we show how the agent’s relative weighting of his private and  group commitment may wax and wane depending upon the stakes of the  inter-group competition.

   Keywords: Sociality, groups, norms, choice of groups, compliance with norms, inter-group competition

   JEL: D01 D11

URL: http://d.repec.org/n?u=RePEc:phs:dpaper:201604&r=soc

7. The Family Peer Effect on Mothers' Labour Supply

   Nicoletti, Cheti (University of York)

   Salvanes, Kjell G. (Norwegian School of Economics)

   Tominey, Emma (University of York)

 The documented historical rise in female labour force participation has  flattened in recent decades, but the proportion of mothers working full-time  has steadily increased. We provide the first empirical evidence that the  increase in mothers' working hours is amplified through the influence of  family peers. Using Norwegian administrative data we study the long-run  influence of the family network on mothers' labour decisions up to seven  years post birth. For identification, we exploit partially overlapping peer  groups and assume that a mother interacts with her neighbours and family but  not with her family's neighbours. We explore mechanisms including information  and imitation.

   Keywords: peer effects, family network, sibling spillover effects, cousins spillover effects, instrumental variable estimation

   JEL: D85 C21 C26

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9927&r=soc

8. Homophily and Transitivity in Dynamic Network Formation

   Bryan S. Graham

 In social and economic networks linked agents often share additional links in  common. There are two competing explanations for this phenomenon. First,  agents may have a structural taste for transitive links -- the returns to  linking may be higher if two agents share links in common. Second, agents may  assortatively match on unobserved attributes, a process called homophily. I  study parameter identifiability in a simple model of dynamic network  formation with both effects. Agents form, maintain, and sever links over time  in order to maximize utility. The return to linking may be higher if agents  share friends in common. A pair-specific utility component allows for  arbitrary homophily on time-invariant agent attributes. I derive conditions  under which it is possible to detect the presence of a taste for transitivity  in the presence of assortative matching on unobservables. I leave the joint  distribution of the initial network and the pair-specific utility component,  a very high dimensional object, unrestricted. The analysis is of the `fixed  effects' type. The identification result is constructive, suggesting an  analog estimator, whose single large network properties I characterize.

   JEL: C1 C14 C23 C25 D85

URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:22186&r=soc

9. Getting ahead or falling behind? – The importance of households’ ability to manage idiosyncratic risk in rural Ghana

   Naschold, Felix

 A better understanding of why some households get ahead while others fall  behind is crucial for achieving further worldwide poverty reduction in  future. Who moves in and out of poverty over time has been the focus of a  growing literature on household level poverty dynamics. A central theme in  this literature has been the role of shocks and their impact on households’

 risk management strategies. Risk and uncertainty diminish the current level  of households’ economic well-being as well as their prospects for the future.

 This is particularly true when livelihood-generating activities are highly  stochastic, as they are for many rural households in developing countries,  and when mechanisms to insure against risk are either non-existent or  insufficient. Moreover, the ability to manage risk is becoming more important  as economic factors that are key to the poor, e.g., food prices, have become  more volatile. Households face two distinct sources of risk: First, covariate  risk such as drought, rainfall, pests or civil war affect the entire  population. These types of risks have been the focus of much of the existing  literature on welfare dynamics. Second, idiosyncratic or household-specific  risk such as medical expenses or crop and livestock losses. Evidence suggests  that such idiosyncratic risk often dominates covariate risk and that the  latter requires different strategies to mitigate. This paper examines the  importance of idiosyncratic risk for households in rural Ghana and the  effectiveness of various ex ante and ex post risk management strategies in  mitigating this risk, including support from social networks, self-insurance  in the form of savings, accessing credit and diversifying livelihood  activities. This paper uses an unusually rich set of panel data from rural  Ghana covering the period between 1997 and 2009 and containing information on  a large variety of formal and informal insurance mechanism, including on  access to social networks, self-insurance, income diversification and asset  sales. It quantifies the impact of different types of idiosyncratic shocks on  households’ ability to get ahead, examines the individual and joint effect of  households’ access to different types of insurance mechanisms and assesses  the relative effectiveness of different risk management strategies on  households’ ability to bounce back from negative shocks and to escape  poverty. This paper makes three main contributions. First, it examines the  impact of idiosyncratic risk on household level welfare dynamics, focusing on  how idiosyncratic shocks affect welfare dynamics paths and whether those  effects are mitigated differentially by different risk management strategies.

 Facing uninsured risk ex ante and coping with consequences of risk ex post  households employ a range of strategies to minimize their exposure to risk  and to smooth their consumption over time. These include mechanism such as  self-insurance through savings (and precautionary savings), formal and  informal insurance and credit, social networks, and labor market access and  income diversification. Existing studies typically only have data for one of  these insurance mechanisms. The second contribution of this paper is examine  each of these risk management strategies individually as well as jointly. The  unique panel data makes it possible to both assess the relative importance of  these mechanisms as well as identify complementarities between them. This  extension beyond a single risk management mechanism allows a more appropriate  modeling of the behavior of households that face risk as when one or more  risk management mechanisms are unavailable households resort to other  mechanisms. A corollary question addressed is whether there are critical  thresholds that establish some minimum effective scale of such risk  management strategies. Existing studies impose strong assumptions on the  low-order polynomial relationship between risk management strategies and  welfare dynamics. This paper’s approach allows for such potentially highly  non-linear threshold effects by using innovative semi-parametric panel data  estimators. The paper also explores the interaction, substitution and  complementarities between different risk management strategies. Third, this  paper contributes to the emerging literature on household level welfare  dynamics in Subsaharan Africa by providing a case study from rural Ghana. The  results suggest varying degrees of effectiveness for the different mechanisms  households use to reduce and mitigate risk. Having own savings and being able  to draw on larger social networks offers a statistically significantly better  chance of overcoming the consequences of negative shocks. Credit access also  seems to help though the evidence is less strong. A greater diversity of  income sources is associated with greater gains in expenditure but income  diversification does not seem to help in overcoming shocks. This could be a  reflection of many households diversifying into low-return activities that  are positively correlated. Overall the results suggest some effectiveness of  these formal and informal insurance mechanisms. However, even in their  combination they are not sufficient in helping households overcome negative  shocks and to ensure sustained improvement in well-being over time. Thus,  while idiosyncratic risks can be partly ensured at the local level, there is  a need for policy to supplement these mechanisms through social policy.

   Keywords: Ghana, risk, welfare, poverty, social networks, International Development, Risk and Uncertainty,

URL: http://d.repec.org/n?u=RePEc:ags:aaea16:235720&r=soc

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