In this issue we feature 5 current papers on the theme of social capital, chosen by Fabio Sabatini (Università degli Studi di Roma “La Sapienza”):

1. Extreme high temperatures and adaptation by social dynamics: Theory and Evidence from China By Shi, Xiangyu; Gong, Jiaowei; Zhang, Xin; Wang, Chang
2. Spillovers in Criminal Networks: Evidence from Co-offender Deaths By Lindquist, Matthew J.; Patacchini, Eleonora; Vlassopoulos, Michael; Zenou, Yves
3. Political Connections, Allocation of Stimulus Spending, and the Jobs Multiplier By Joonkyu Choi; Veronika Penciakova; Felipe Saffie
4. Endogenous Identity in a Social Network By Christian Ghiglino; Nicole Tabasso
5. Group Image Concerns By Arno Apffelstaedt; Gönül Doğan; Fabian Hoffmann

1. Extreme high temperatures and adaptation by social dynamics: Theory and Evidence from China

   By:	Shi, Xiangyu; Gong, Jiaowei; Zhang, Xin; Wang, Chang
   Abstract:	Using a novel city-level high-frequency panel data set of social and public events in Chinese cities, we document that extreme high temperatures significantly reshape social dynamics. Extreme high temperatures lead to an increase in social cooperation, and the effects are more salient when productivity is lower and labor is more intensively used. This implies extreme high temperatures boost the relative returns of cooperation given lowered productivity. Our estimates and quantitative model suggest that the human race adapts to global warming by reshaping its social dynamics: adaptation via social dynamics offsets about one-third of the negative impacts of extreme high temperatures on the economy.
   Keywords:	Social dynamics; Public events; Social cooperation; Protest; Temperatures; Climate change; China
   JEL:	D7 D9 O1 Q5
   Date:	2024–06
   URL:	https://d.repec.org/n?u=RePEc:pra:mprapa:121358&r=

2. Spillovers in Criminal Networks: Evidence from Co-offender Deaths

   By:	Lindquist, Matthew J. (SOFI, Stockholm University); Patacchini, Eleonora (Cornell University); Vlassopoulos, Michael (University of Southampton); Zenou, Yves (Monash University)
   Abstract:	We study spillover effects within co-offending networks by leveraging deaths of co-offenders for causal identification. Our results demonstrate that the death of a co-offender significantly reduces the criminal activities of other network members. We observe a decaying pattern in the magnitude of these spillover effects: individuals directly linked to a deceased offender experience the most significant impact, followed by those two steps away, and then those three steps away. Moreover, we find that the death of a more central co-offender leads to a larger reduction in aggregate crime. We also provide evidence consistent with a new theoretical prediction suggesting that the loss of a co-offender shrinks the future information set of offenders, altering their perceptions of the probability of being convicted and consequently affecting their criminal behavior. Our findings highlight the importance of understanding spillover effects for policymakers seeking to develop more effective strategies for crime prevention.
   Keywords:	networks, crime, key players, exogenous deaths, spillovers
   JEL:	A14 D85 K42 Z13
   Date:	2024–07
   URL:	https://d.repec.org/n?u=RePEc:iza:izadps:dp17113&r=

3. Political Connections, Allocation of Stimulus Spending, and the Jobs Multiplier

   By:	Joonkyu Choi; Veronika Penciakova; Felipe Saffie
   Abstract:	We study the role of firms’ political influence on the effectiveness of government spending using ARRA as a laboratory. Through an IV approach, we show that a 10 percentage points increase in the share of politically connected spending lowers the job creation effect of stimulus by 33 percent at the state level. We exploit ex-post close state-level elections to establish that firms that contributed to winning candidates create fewer jobs after winning grants. Using a quantitative general equilibrium model, we show that politically connected spending also lowers the aggregate jobs multiplier, and that the dampening effect is rationalized by connected firms charging higher markups.
   JEL:	D72 E62
   Date:	2024–06
   URL:	https://d.repec.org/n?u=RePEc:nbr:nberwo:32574&r=

4. Endogenous Identity in a Social Network

   By:	Christian Ghiglino; Nicole Tabasso
   Abstract:	Interaction with individuals from other socioeconomic classes has been shown to be a main driver for social mobility. We employ tools of social identity theory and network analysis to show how exposure to individuals of different social identities can lead to interactions with them, and an adoption of their identity, creating social mobility. We find that even if all individuals have the same ability, they may endogenously choose different identities, leading to different classes and actions. In particular, we derive a sufficient condition for such an equilibrium to exist, which equates to a novel measure of cohesion. Furthermore, we show that the most socially mobile individuals (changing their identity) are those who either have few connections or a more heterogeneous mix of identities in their connections. Finally, we show that upward social mobility increases action levels in society, but not necessarily welfare.
   Date:	2024–06
   URL:	https://d.repec.org/n?u=RePEc:arx:papers:2406.10972&r=

5. Group Image Concerns

   By:	Arno Apffelstaedt (University of Cologne); Gönül Doğan (University of Cologne); Fabian Hoffmann (University of Cologne)
   Abstract:	We introduce a novel concept, group image concerns, showing that individuals change their behavior and are willing to incur personal costs to cultivate a positive image of their groups. We develop an experimental method to identify and quantify group image concerns, and conduct a series of laboratory and online experiments to measure them in three distinct domains. In the first two experiments focused on charitable behavior, participants donate more when their contributions are publicly associated with their group, despite their individual identity remaining private. They also pay significant amounts to keep low donations from other group members private and to make high donations public. These findings emerge for students in the laboratory, using university affiliation as their group identity, as well as for online participants from the general U.S. population, using religious affiliation as their group identity. Additional online experiments explore group image concerns among Democrats and Republicans regarding their group’s knowledge of the U.S. national anthem, as a measure of patriotism, and among U.S. students concerning their university’s reputation for intelligence in solving matrix completion tasks. We isolate group image concerns from individual image concerns and benchmark them against individual image concerns in our laboratory experiment. Our results establish group image concerns as an important driver of individual behavior and a significant source of utility across various domains.
   Keywords:	social identity and behavior, image concerns, experiments, charitable and prosocial behavior, intelligence, political identity, religious identity, real effort
   JEL:	D01 D91 C92
   Date:	2024–07
   URL:	https://d.repec.org/n?u=RePEc:ajk:ajkdps:324&r=

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