Showing papers in "Journal of Socio-economics in 2008"

Putting a price tag on friends, relatives, and neighbours: Using surveys of life satisfaction to value social relationships

Abstract: There is substantial evidence in the psychology and sociology literature that social relationships promote happiness for the individual. Yet the size of their impacts remains largely unknown. This paper explores the use of shadow pricing method to estimate the monetary values of the satisfaction with life gained by an increase in the frequency of interaction with friends, relatives, and neighbours. Using the British Household Panel Survey, I find that an increase in the level of social involvements is worth up to an extra £85,000 a year in terms of life satisfaction. Actual changes in income, on the other hand, buy very little happiness.

Happiness and health: Well-being among the self-employed

Abstract: Is well-being greater among the self-employed than among wage-earners? In order to investigate this question, data from the Swedish Level-of-Living Survey for the 2 years 1991 and 2000 are used and six indicators of well-being are considered: (1) job satisfaction, (2) life satisfaction, (3) whether the job is stressful, (4) whether the job is mentally straining, (5) mental health problems, and (6) poor general health. Six logit models are estimated and to handle the possible selection of more satisfied individuals and individuals more able to handle stress into self-employment, conditional fixed-effects logit models are estimated for each of the outcomes. We find that self-employment leads to an increase in job satisfaction. We also find a positive correlation between self-employment and life satisfaction. There is some evidence that self-employment leads to more mental health problems, and that the self-employed are less likely to perceive their job as mentally straining.

Defining the co-operative difference

Abstract: The paper argues that co-operative firms play a set of roles in market economies, based on the co-operative values and principles that are rarely noted in economic literature. Among other, those roles are to internalize market externalities, to serve as laboratories for social innovation, to espouse social entrepreneurship, to promote ethical business practices, and to aid in development. While economic literature has been focused primarily on the ownership and control structure as a source of the difference, we argue that this focus paints an incomplete picture. The principles of co-operation may supply additional insights in addressing questions why co-operatives may thrive in areas of low labour mobility, prevalent market failures, oligopoly markets, and labour intensive industries. They may also offer insights into strategies and survival in global markets of successful co-operative firms.

Assessing and explaining the relative efficiency of local government

Abstract: We assess the relative efficiency of local municipalities using Data Envelopment Analysis and parametric analysis. As an output measure we compute a composite local government indicator of municipal performance, using data for Portuguese municipalities. This allows assessing the extent of possible municipal improvement relative to the “best-practice” frontier. Our results suggest that most municipalities could improve performance without necessarily increasing municipal spending. In a second stage efficiency scores are explained by means of a Tobit analysis with a set of relevant explanatory socio-economic factors playing the role of non-discretionary inputs, such as education and per capita purchasing power.

The role of corporate social responsibility in strong sustainability

Abstract: The aim of this paper is to analyze to what extent corporate social responsibility (CSR) contributes to strong sustainability, i.e. to what extent the use of natural resources and the environment is possible, given the current level of economic activity. We therefore examine responsibilities that corporations should take in order to fulfil the requirements of strong sustainability. Based on current CSR practices and theory as well as on businesses motivations regarding environmental and social investments, we will introduce the role of corporations in influencing consumption patterns. Furthermore, we will attempt to answer to what extent responsible corporate behaviour is determined by the current economic system.

Inequality and public good provision: An experimental analysis

Abstract: Recent studies report that economic inequality is associated with reduced government expenditures on social programs. Several prominent social scientists, including Putman (Putnam, R., 2000. Bowling Alone. Simon and Schuster, New York), attribute this to the detrimental “psychosocial effects” of group heterogeneity on cooperation. We test the hypothesis that inequality within a group reduces individual contributions in a public goods experiment. Unlike previous examinations of inequality and public good provision, we introduce inequality by manipulating the levels and distributions of fixed payments given to subjects. When made salient through public information about each individual's standing within the group, inequality reduces contributions to the public good for all group members.

Jobs as Lancaster Goods: Facets of Job Satisfaction and Overall Job Satisfaction

Abstract: Overall job satisfaction is likely to reflect the combination of partial satisfactions related to various features of one's job, such as pay, security, the work itself, working conditions, working hours, and the like. The level of overall job satisfaction emerges as the weighted outcome of the individual's job satisfaction with each of these facets. The purpose of this study is to determine the extent and importance of partial satisfactions in affecting and explaining overall job satisfaction. Using the European Community Household Panel (ECHP) a two layer model is estimated which proposes that job satisfaction with different facets of jobs are interrelated and the individual's reported overall job satisfaction depends on the weight that the individual allocates to each of these facets. For each of the 10 countries examined, satisfaction with the type of the job is the main criterion by which workers evaluate their job for both the short and the long term.

Culture and entrepreneurship? African American and immigrant self-employment in the United States

Abstract: This paper analyzes the evolution of African American entrepreneurship by comparing the patterns of development of African American entrepreneurship and immigrant entrepreneurship. Whereas most literature focuses on African American culture as the reason for limited entrepreneurial success compared to certain immigrant groups, this paper examines how social, economic, and political forces have adversely influenced the development of Black entrepreneurship compared to various immigrant groups. Using 90 years of census data, we also find empirical support consistent with our assertion that many immigrants have resources (not available to native non-Whites) that facilitate entrepreneurship.

Economic and hypothetical dictator game experiments: Incentive effects at the individual level

Abstract: The paper compares behavior in economic dictator game experiments played with actual money (amounts given by “dictator” subjects) with behavior in hypothetical dictator game experiments where subjects indicate what they would give, although no money is actually exchanged. The average amounts transferred in the two experiments are remarkably similar. We uncover meaningful individual differences in real and hypothetical allocations and demonstrate the importance of two personality traits – agreeableness and extraversion – in reconciling them. We conclude that extraverts are “all talk;” agreeable subjects are “for real”.

Social capital renewal and the academic performance of international students in australia

Abstract: Many believe that social capital fosters the accumulation of human capital. Yet international university students arrive in their host country generally denuded of social capital and confronted by unfamiliar cultural and educational institutions. This study investigates how, and to what extent, international students renew their social networks, and whether such investments are positively associated with academic performance. We adopt a social capital framework and conduct a survey of international students at a typical Australian university in order to categorise and measure investments in social capital renewal, and test a multivariate model of academic performance that includes social capital variables, amongst others, as regressors. Our survey results reveal a high degree of variability in social capital investment across students and, amongst the more active, a tendency to build close networks in the main with students from their own country of origin. Our empirical results suggest that such investments are not associated with improved academic performance but are associated with increased well being.

Repayment rate of loans from semi-formal financial institutions among small-scale farmers in Ethiopia: Two-limit Tobit analysis

Abstract: Improving small-scale farmers’ access to credit is one of the ways of achieving increased agricultural productivity to reduce poverty in Ethiopia. In this study, a two-limit Tobit model was used to analyze the determinants of repayment rate of loans from semi-formal financial institutions among small-scale farmers in Ethiopia. Small group lending, was found to be related to the loan repayment rate of the farmers positively and significantly. Furthermore, agro-ecology, total land holding size, total livestock holding, experience in the use of agricultural extension services, contact with extension agents and income from off-farm activities were found to affect the loan repayment rate of the households significantly. Consideration of these factors would reduce default rates on borrowed funds from semi-formal credit sources in the area.

Press media reporting effects on risk perceptions and attitudes towards genetically modified (GM) food

Abstract: Little is known about the role and mechanisms through which the press media reporting influences attitudes and risk perceptions. Whilst some approaches stress the prevalent idea that risks are partly the creation or amplification of the media, other scholars find that the media plays a rather neutral role as a conveyor only, which calls for further empirical exploration, especially in areas where consumers have limited knowledge. This paper examines both quantitative and qualitative empirical evidence to scrutinize whether the press media coverage and reporting had some effect on the change in attitudes towards and risk perceptions of new genetically modified (GM) foods between 1999 and 2004 in Spain and the United Kingdom (UK). Results suggest that differences in media reporting along with attitudes towards journalism correlate with attitudes and risk perception to GM food whilst trust does not appear to exert any significant effect. This result reinforces the hypothesis of a media bias in newly created technology risks.

The effect of public spending on suicide: Evidence from U.S. state data

Abstract: This paper investigates the effect of public spending on health and welfare on total, male and female suicide rates using panel data for U.S. states over the time period 1982–1997. We show that the share of health and welfare in total public spending are strong predictors of suicide rates and yield estimated coefficients that are both statistically significant and economically meaningful. In parsimonious specifications, we also find that suicide rates are systematically higher in states with higher divorce rates, but average income level, income inequality and unemployment rates do not have a robust impact on suicide. The model provides a better fit to male than to female suicide data. Our main results hold up to a series of specification tests.

Ibn Khaldun's theory of development: Does it help explain the low performance of the present-day Muslim world?

Abstract: The first part of this paper presents Ibn Khaldun's multidisciplinary and dynamic theory of development. This theory argues that the development or decline of an economy or society does not depend on any one factor, but rather on the interaction of moral, social, economic, political and historical factors over a long period of time. One of these factors acts as the trigger mechanism and, if the others respond in the same direction, development or decline gains momentum through a chain reaction until it becomes difficult to distinguish the cause from the effect. Part II of this paper applies this theory to Muslim countries to explain their low performance.

Microcredit and the socio-economic wellbeing of women and their families in Cairo

Abstract: Microcredit has become one of the most important tools used to combat poverty and to enhance families’ wellbeing. This research aims at testing the following hypothesis: microcredit is positively linked to women's socio-economic wellbeing in Cairo. It is of special interest because it is a leader in evaluating this kind of intervention in Cairo; it uses primary source data and has a public policy orientation. The results confirmed what was previously reported in the literature, namely the high correlation between microcredit and children's education, income and assets and disproved studies that found microcredit to improve health and harmony in the family.

The role of co-operatives in poverty reduction: Network perspectives

Abstract: Newly emerging nations in the developing world put great efforts into developing multi-purpose co-operative societies that, it was hoped, would bring the benefits of development to the rural poor. With some exceptions these failed to live up to expectations; having been created by governments they remained controlled by the interests of government, party and civil service. Then, under structural adjustment programmes they either collapsed or were reformed. Some new, more genuine co-operative sectors are now emerging. As they do, co-operatives face new challenges brought about by continuing processes of economic globalisation, the IT revolution, and changes in the national and international balance of powers. To survive and thrive, the ability for co-operative organisations to network effectively at both the local level and beyond is becoming increasingly important. This paper seeks to examine the relevance of the numerous theoretical perspectives on network formation and network management to the newly-emerging co-operative sectors in the developing world. Such networks are being built both within the co-operative sector itself (e.g. through federation) and with a range of other bodies, each locally, nationally and internationally. The paper seeks to provide a framework for understanding the processes that drive the formation of relationships, networks and partnerships, and asks questions of how such alliances can be governed and managed effectively.

Cooperatives as the “enfants terribles” of economics: Some implications for the social economy

Abstract: The cooperatives are too economically oriented to be included in the non-profit sector and too socially oriented to be considered as an economic for-profit organization. These “enfants terribles” are wholly depersonalized. They represent a broader phenomenon, going beyond the dominant global economy. As such, cooperatives are seen as a model based on dual components, an economic and a social. Here lies the source of the incompatibility between the hegemonic economic paradigm and an organizational rationale claiming to be based on the co-existence of two features, the social and the economic. Therefore, this article supports the idea of non-profit economy, the cornerstone of the social economy but facing outward offering competing goods and services which can facilitate the market economy and mitigate the tendency towards oligopoly.

Economic valuation of coastal water quality and protest responses: A case study in Mitilini, Greece

Abstract: The aim of this study was to evaluate environmental benefits resulting from the construction of a Sewage Treatment Plant (STP) in Mitilini, Greece. The main benefits identified were the improvement of the coastal water quality and subsequent impacts on citizens’ activities. The valuation was conducted using the Contingent Valuation Method (CVM) through the elicitation of individuals’ willingness to pay (WTP). Due to the significant amount of zero and protest responses, different measurements of mean WTP were calculated and the need for further research on social factors which influence individuals’ valuation is emphasized.

Meta-regression analysis as the socio-economics of economics research

Abstract: Meta-regression analysis (MRA) provides an empirical framework through which to integrate disparate economics research results, filter out likely publication selection bias, and explain their wide variation using socio-economic and econometric explanatory variables. In dozens of applications, MRA has found excess variation among reported research findings, some of which is explained by socio-economic variables (e.g., researchers’ gender). MRA can empirically model and test socio-economic theories about economics research. Here, we make two strong claims: socio-economic MRAs, broadly conceived, explain much of the excess variation routinely found in empirical economics research; whereas, any other type of literature review (or summary) is biased.

Social Capital in the creation of Human Capital and Economic Growth: A Productive Consumption Approach

Abstract: Social capital is a broad term containing the social networks and norms that generate shared understandings, trust and reciprocity, which underpin cooperation and collective action for mutual benefits, and creates the base for economic prosperity. This study deals with the formation of social capital through development of human capital that is created from productive consumption. This paper attempts to formalize incorporation of social capital (SK). This paper sets up a one-sector growth model, where the engine of growth is capital accumulation. The production function for final output is of the AK – type, which uses aggregate capital as single input. Aggregate capital is represented by a Cobb-Douglas index comprising three types capital. Human capital accumulation results from productive consumption and an increase in social capital is driven by the existence of human capital. The optimal growth rate of consumption is derived and it is shown that both human capital and social capital accumulation affect the equilibrium growth rate. Finally, paper presents some empirical evidence on social capital and economic growth.

Personality preferences in laboratory economics experiments

Abstract: Student volunteers at the U.S. Naval Academy (USNA) participated in one of the following one-shot games: a dictator game, an ultimatum game, a trust game, or a prisoner's dilemma game. We find limited support for the importance of personality type for explaining subjects’ decisions. With controls for personality preferences, we find little evidence of behavioral differences between males and females. Furthermore, we conclude that seniority breeds feelings of entitlement—seniors at USNA generally exhibited the least cooperative or other-regarding behavior.

Family finances, individualisation, spending patterns and access to credit

Abstract: This paper presents and discusses empirical data suggesting that couples in the United Kingdom and elsewhere are becoming more individualised in their financial arrangements. Data on access to credit, and spending responsibilities, are used to explore the implications of individualisation. It is suggested that, though a couple's decision to keep their money separate may be motivated by a desire for equality and autonomy, the effect in some households may be to create inequality between the partners. The use of credit cards, which are essentially an individualised form of money, can privilege those with good credit ratings and disadvantage those who have less access to new forms of money. Finally, a wider view of the topic is explored, using evidence on the intra-household economy, on spending patterns and access to credit in sub-Saharan Africa, a part of the world with a long tradition of ‘separate pots’ for married couples. The article concludes that many of the issues in sub-Saharan Africa also apply in the ‘developed’ world.

Family unpredictability, future discounting, and risk taking

Abstract: Risk taking is predicted to vary with future discounting, as immediate rewards would be overvalued compared to those in the distant future. Degree of future discounting may be increased by unpredictability in the childhood environment. Here we assess relationships among risk taking, future discounting, the developmental environment, and biological factors, using surveys of 151 college students (19.2% men and 80.8% women; mean age 22.9). In structural equation models, environmental unpredictability had both direct and indirect effects on risk taking. Much but not all of its effect was mediated by future discounting.

Separate financial entities?: Beyond categories of money management

Abstract: The work of Pahl [Pahl, J., 1989. Money and Marriage. Macmillan, London; Pahl, J., 1995. His money, her money: recent research on financial organisation in marriage. Journal of Economic Psychology, 16, 361–376] has been highly influential and her typology of money management (in various forms) has been widely used. However, in the light of increasing diversity in intimate relationships and associated forms of money management, a number of researchers have been calling for a more nuanced approach. In this paper, we explore the financial perceptions and practices that lie behind the relatively under-researched but increasingly popular systems of independent management (IM) and partial pooling (PP). Using data drawn from two recent qualitative studies of money management in heterosexual couples (18 cohabiting and 42 getting married) we focus on a subset of those who were using either IM or PP. The findings indicate that classifying couples on the basis of objective financial arrangements does not provide an accurate indication of each partner's standard of living or access to money. Rather than operating more or less as separate financial entities (as implied by the category labels) the picture is much more complex. Couples using IM or PP seem to handle and perceive money in a wide variety of ways, with different implications for individual well-being, depending on whether they had distinct, blurred, or shared perceptions of ownership. The latter are linked to the way partners view their relationship, in terms of permanence, commitment, and ideology, and also provide clues to how stable a particular system of management may be over time. The implications and directions for future research are discussed.

Worker well-being and perceived fairness: Survey-based findings from Italy

Abstract: Based on a survey of 1958 employees in 228 Italian social service organizations under public and private ownership, this paper shows that worker well-being is crucially influenced by fairness concerns. The positive effect is strongest for procedural fairness, which is interpreted as a crucial emerging property of the organizational setting. The influence of the disutility of effort and of the wage is much weaker, but still coherent with economic theory. Public organizations are found to be at a disadvantage with respect to the private sector regarding both the degree of satisfaction and perceived fairness. Non-profits record the highest scores, mainly as regards procedural fairness.

Institutions and economic change: a critical survey of the new institutional approaches and empirical evidence

Abstract: The purpose of this paper is to review the main literature that has analyzed the channels through which institutions influence economic change, hence development. The interest for this topic arises from the relatively recent consensus that has emerged among scholars and policy makers in considering institutions a key factor shaping the outcome of the economic game. The aim is pursued by discussing the theoretical approaches proposed within the New Institutional Economics to inquiry into institutional issues. Besides, the empirical evidence resulting from the major studies that have lately investigated the nexus between institutions and economic performance is presented as well.

Constructing and reconstructing gender: Reference group effects and women's demand for entrepreneurial capital

Abstract: Women's acquisition of entrepreneurial capital may be restricted by demand side identity constraints as women who pursue non-traditional entrepreneurial livelihoods may stand at odds with activity-regulating social norms. By explicitly incorporating social norms into a model of women's decision-making, this paper provides an analytical framework that helps understand the social factors that limit women's demand for capital. The model shows that because of these social effects, a credit program that relaxes supply constraints may reconstruct gender norms and have a social multiplier effect, shifting an entire group or community to a higher-income equilibrium. Using a social effects econometric framework, the paper then confirms the existence of reference group effects on women's demand for entrepreneurial capital in rural Paraguay. Identification of these as endogenous social effects relies on the separate measurement of each woman's social reference group, allowing the use of village-level fixed effects to sweep away confounding contextual influences. Results are robust to the use of a restricted reference group comprised solely of ‘inherited’ family members, and analysis of demand by male partners reveals that the social effect is gendered and hence likely to reflect social norm effects rather than endogenous social learning or exogenous social effects.

From tackling poverty to achieving financial inclusion—The changing role of British credit unions in low income communities

Abstract: This paper offers an analysis of the changing role of co-operative credit unions in tackling poverty and promoting financial inclusion in Britain. It examines the reality of poverty in low income communities and endeavours to critique the actions, methodologies and initiatives currently being adopted by credit unions to achieve financial inclusion. It examines the role of the UK government in its support for credit unions and offers an early analysis of HM Treasury's Financial Inclusion Fund. The paper argues that credit unions are best placed within the financial services industry to make an impact within financially excluded communities.

Cross-Cultural Overconfidence and Biased Self-Attribution

Abstract: We use a stock-market game and predictions of examination marks to examine differences between overconfidence and biased self-attribution (BSA) of British and Asian students. Although different overconfidence measures show little correlation, Asians are consistently more overconfident than the British. All are equally prone to BSA.

Job satisfaction and response to incentives among China's urban workforce

Abstract: This article examines job satisfaction and incentive structures among China's urban workforce. The main determinants of job satisfaction are found to be age, education, occupation and personal income. The criteria that Chinese urban employees considered most important when choosing a job were job stability, a high income and professional development. Employees who considered job stability, high income, professional development opportunities, work/life balance and provision of social insurance as being important when selecting a job were more likely to have higher levels of job satisfaction.