scispace - formally typeset
Search or ask a question

Showing papers in "Journal of Socio-economics in 2011"


Journal ArticleDOI
TL;DR: A review of the literature in this area including various different models, explanations and underlying mechanisms used to explain anchoring effects can be found in this article, where mood and individual difference (ability, personality, information styles) correlates of anchoring as well as the effect of motivation and knowledge on decisions affected by anchoring.
Abstract: The anchoring effect is one of the most robust cognitive heuristics. This paper reviews the literature in this area including various different models, explanations and underlying mechanisms used to explain anchoring effects. The anchoring effect is both robust and has many implications in all decision making processes. This review paper documents the many different domains and tasks in which the effect has been shown. It also considers mood and individual difference (ability, personality, information styles) correlates of anchoring as well as the effect of motivation and knowledge on decisions affected by anchoring. Finally the review looks at the applicants of the anchoring effects in everyday life.

742 citations


Journal ArticleDOI
TL;DR: The authors explored the relationship between English language proficiency and earnings in South Africa, using new data from the first wave of the National Income Dynamics panel survey of 2008, and found that large returns among Africans to reading and writing English very well, and particularly among those who have a tertiary education.
Abstract: In this paper we explore the relationship between English language proficiency and earnings in South Africa, using new data from the first wave of the National Income Dynamics panel survey of 2008. Much of the literature on this topic has studied the impact on earnings of host country language acquisition among minority groups of immigrants to developed countries. In our study we analyse the returns to language skills in a developing country context where the dominant language of business, government and education is that of the former colony, although not more than one percent of the African majority population group speaks English as their home language. Our findings suggest large returns among Africans to reading and writing English very well, and particularly among those who have a tertiary education. We also briefly consider the implications of these results for language and education policy in South Africa in the post-apartheid period.

144 citations


Journal ArticleDOI
TL;DR: This paper examined the implicit influences of Christian religious representations on prosociality by priming participants with religious words in a scrambled sentence task before they make a dictator game and a prisoner's dilemma game decision.
Abstract: We investigate how implicit influences of Christian religious representations affect prosociality. We examine the direct impact of religion as an independent variable on prosocial behavior. We do so by priming participants with religious words in a scrambled sentence task before they make a dictator game and a prisoner's dilemma game decision. Priming religious words significantly increased prosocial behavior in both games: participants in the treatment group were more generous and cooperative than participants in the control group. The priming effect was present regardless of participants’ self-reported religiosity. Self-reported religiosity was not correlated with generosity or cooperation.

101 citations


Journal ArticleDOI
TL;DR: In this paper, the influence of individual social capital on willingness to pay for environmental goods was investigated through an empirical study, and its influence on WTP for water quality improvement was explored.
Abstract: Several factors have been identified as determinants of willingness to pay (WTP), including socio-economic and environmental elements. The present article aims to investigate the influence of individual social capital on willingness to pay for environmental goods. In particular, through an empirical study, a multi-dimensional measurement of social capital is conducted and its influence on WTP for water quality improvement is explored. According to the results of the survey it is observed that social capital is a significant explanatory parameter of WTP.

101 citations


Journal ArticleDOI
TL;DR: In this article, the authors investigated the three most frequently studied characteristics of entrepreneurs: motivation, self-efficacy, and risk attitudes, and found that the most important motivations for entrepreneurship are independence and achievement, rather than personal preference and liking.
Abstract: In this research were investigated the three most frequently studied characteristics of entrepreneurs – motivation, self-efficacy, and risk attitudes. We divided the sample of entrepreneurs into two subgroups: opportunity-driven vs. necessity-driven. In agreement with findings of research performed in countries with developed market economies, we found that the need for independence and the need for achievement were of higher importance to the entrepreneurs than to the non-entrepreneurs. However, this was only true of the opportunity-driven subgroup of entrepreneurs, while not of those categorized as necessity-driven. In contrast, the most important motive in the group of non-entrepreneurs and as well as the necessity-driven subgroup of entrepreneurs was job security. In accordance with Knight's claim, we found that opportunity-driven (but not necessity-driven) entrepreneurs revealed higher levels of self-confidence than the group of employees. We did not find support for the claim that entrepreneurs are more risk-prone than wage earners. On the other hand, entrepreneurs (both opportunity- and necessity-driven) reported more everyday risky investment activities than wage earners did. We interpret this observation in terms of the necessity of entrepreneurs for risk-taking, rather than personal preference and liking.

93 citations


Journal ArticleDOI
TL;DR: In this article, a cluster analysis of data from a representative survey of 345 investors in Greece identified three main segments of investors: high profile investors, moderate profile investors and low profile investors.
Abstract: This study attempts to group investors (individuals and professionals) into different segments based on their psychological biases and personality traits and, then, to examine whether, and how, these biases and traits drive their investment behaviour. The behavioural finance literature suggests four main factors that influence investment behaviour: overconfidence, risk tolerance, self-monitoring and social influence. Adopting this approach, a cluster analysis of data from a representative survey of 345 investors in Greece identified three main segments of investors: high profile investors (a high degree of overconfidence, risk tolerance, self-monitoring and social influence), moderate profile investors (a moderate level of overconfidence, risk tolerance, self-monitoring and social influence) and low profile investors (a low degree of overconfidence, risk tolerance, self-monitoring and social influence). The major finding of the analysis shows that the higher the investors’ profile, the higher the performance of these investors on stock trading. The results will expand investors’ knowledge about the financial decision-making process and trading behaviour.

93 citations


Journal ArticleDOI
TL;DR: In this article, the authors used an analytical method to separate generational, period, and aging effects on financial risk tolerance, and found that aging and period effects on risk tolerance were statistically significant.
Abstract: a b s t r a c t The importance of investment portfolio allocation has become more apparent since the onset of the late 2000s Great Recession. Individual willingness to take financial risks affects portfolio decisions and investment returns among other factors. Previous research found that people of different ages have dis- similar levels of risk tolerance but the effects of generation, period, and aging were confounded. Using the 1998-2007 Survey of Consumer Finances cross-sectional datasets, this study uses an analytical method to separate such effects on financial risk tolerance. Aging and period effects on financial risk tolerance were statistically significant. Implications for researchers and financial planning practitioners and educators are provided.

91 citations


Journal ArticleDOI
TL;DR: In this paper, the impact of micro-credit on household welfare outcomes such as income and consumption in rural China was evaluated using a two-year panel dataset, including both primary and secondary data collected through a household survey.
Abstract: Microcredit has gained worldwide acceptance in recent years as a flexible mechanism to expand individuals’ (especially the poor's) access to financial services, which is considered as an efficient way to achieve poverty reduction and other social development. A large number of empirical studies have been done to examine the welfare effects of microcredit on the borrowers and such effects are well documented in many other countries such as Bangladesh. However, the impacts of microcredit on China rural households’ livelihood are not well documented. This paper attempts to empirically evaluate the impact of microcredit on household welfare outcomes such as income and consumption in rural China. The estimation is based on the difference-in-difference approach which is an increasingly popular method of tackling the selection bias issue in assessing the impacts of microcredit. The study uses a two-year panel dataset, including both primary and secondary data collected through a household survey in rural China. Our empirical results favour the wide belief in the literature that joining microcredit programme helps improve households’ welfare such as income and consumption. Despite the optimistic findings on how microcredit has changed the rural households’ living conditions, our results show that the vast majority of the programme participants are non-poor, which casts some doubts on the social potential (such as poverty reduction) of China's microcredit programmes.

79 citations


Journal ArticleDOI
TL;DR: In this article, the authors investigated the importance of two forms of "impure" altruism (warm glow and reputational concerns) as potential determinants of both time and money gifts.
Abstract: This paper investigates the importance of two forms of ‘impure’ altruism (“warm glow” and reputational concerns) as potential determinants of both time and money gifts. We first develop a comprehensive behavioral model which accounts for both types of donations, as well as for decisions about domestic and market hours of work. We then provide an empirical test of these drivers for giving using survey data for Italy. Results suggest that, according to the theoretical predictions, proxies for ‘impure’ altruism are important determinants of donations. Moreover, the unobservable determinants driving money and time donations are positively correlated, suggesting a certain degree of complementarity between the two decisions. Our findings also stress the importance of considering a behavioral model accounting for a full set of time and income uses to better characterize individual decisions to donate.

75 citations


Journal ArticleDOI
TL;DR: In this article, the authors argue that levels of trust are shaped by formal and informal institutions and apply a multilevel regression approach to examine the ways that institutions and contextual factors affect individuals' self-reported trust levels.
Abstract: In this study, we argue that levels of trust are shaped by formal and informal institutions. We discuss statistical test results that support this view. These utilize World Value Survey results and related data sources to examine the ways that institutions and contextual factors affect individuals’ self-reported trust levels. This investigation is the first, to our knowledge, to take into account micro-unit along with macro-unit characteristics to analyze the nature of contextual effects and does so by applying a multilevel regression approach.

67 citations


Journal ArticleDOI
TL;DR: In this article, a survey of 742 rural producers in five conflicted areas found that the perceptions of insecurity do correlate significantly (negatively) with levels of subjective well-being and also found a significant contribution of social capital to levels of SWB.
Abstract: Subjective well-being (SWB), the evaluation that people carry out of their lives, has been proposed as an alternative measure of tracking the development of communities instead of economic growth. As part of a more general research question, in which we tested the impact of subjective insecurity on the choice of hybrid organizational modes, we hypothesized that subjective insecurity does negatively correlate with SWB and that subjective and objective insecurities are not significantly correlated. Subjective insecurity consisted of three items: perceptions of political, economic, and communitarian insecurity. We proposed that the relationship between insecurity and SWB is moderated by the level of social capital found in the region. Social capital was defined as interpersonal trust as well as the frequency of participation of producers in voluntary associations. We used multiple and multilevel regression models to test the hypotheses. Based on a survey of 742 rural producers in five conflicted areas, we found that the perceptions of insecurity do correlate significantly (negatively) with levels of SWB and we also found a significant contribution of social capital to levels of SWB. Significant correlations between demographic variables and SWB corroborated results of previous research. These results have important implications for public policy and future research.

Journal ArticleDOI
TL;DR: In this paper, the authors investigated the relationship between sport participation and crime in twenty Italian regions over the period 1997-2003 and found that sport participation is associated with crime, but only weakly significant.
Abstract: What is the impact of sport participation on society? This paper is tackling this point by studying whether or not there is a relationship between sport participation and crime. A panel dataset have been constructed for the twenty Italian regions over the period 1997–2003. Results show that: (i) there is a robust negative association between sport participation and property crime; (ii) there is a robust negative association between sport participation and juvenile crime; (iii) there is a positive association between sport participation and violent crime, but it is only weakly significant. Interestingly, there is a complementary effect between education and sport participation on crime.

Journal ArticleDOI
TL;DR: In this article, the authors explore the connection between trust and a broader measure of development, the UN Human Development Index, and find that trust is significantly associated with faster human development in the 1980-2005 period.
Abstract: A series of studies connect social trust to economic growth. In this paper, we explore the connection between trust and a broader measure of development, the UN Human Development Index. We find that trust is significantly associated with faster human development in the 1980–2005 period. The impact of trust occurs mainly in less democratic countries.

Journal ArticleDOI
TL;DR: In this paper, the authors investigated the effect of retirement on psychological wellbeing and found that retirement has a significant positive impact on subsequent psychological well-being, supporting the continuity theory notion that retirement may actually improve psychological wellbeing.
Abstract: The objective of this study is to investigate the effect of retirement on psychological wellbeing. The empirical part of this study uses seven longitudinal waves of the Canadian National Population Health Survey, spanning 1994 through 2006. To account for biases due to unobserved individual specific heterogeneity, this study deploys panel data methodologies such as fixed effect method, fixed effect logistic method, and instrumental variable fixed effect method. Using age specific retirement incentives provided by Canada's Income Security System as instruments for retirement behavior, the study finds that retirement has significant positive impact on subsequent psychological well-being. The findings of the study would substantiate the continuity theory notion that retirement may actually improve psychological well-being.

Journal ArticleDOI
TL;DR: In this paper, the authors conduct trust game experiments in which subjects can sometimes exchange proposals either in numerical (tabular) form, or using chat messages followed by exchange of numerical proposals.
Abstract: We conduct trust game experiments in which subjects can sometimes exchange proposals either in numerical (tabular) form, or using chat messages followed by exchange of numerical proposals. Numerical communication significantly increases trusting and trustworthiness; inclusion of 1-min verbal communication in a chat room generates an even larger and more robust effect. On average, trustors send $9.21 of their $10 endowment as compared to $7.66 in the standard trust game, and trustees return 56% vs. 45%. Chat enhances the likelihood that trustors and trustees will adhere to non-binding agreements they make—an additional interpretation of trusting and trustworthiness—and increases the probability that subjects will propose, accept, and abide by equal-division agreements. Analysis of the content of subjects’ verbal communication shows that what is said, and not only the fact that things are said, significantly affects outcomes.

Journal ArticleDOI
TL;DR: In this paper, the authors studied the relations between bilateral FDIs and immigrant networks of France, Germany, UK, Italy and Spain, and the emigrant diasporas of Italy and Spanish.
Abstract: This paper studies the relations between bilateral FDIs and immigrant networks of France, Germany, UK, Italy and Spain, and the emigrant diasporas of Italy and Spain It focuses on skilled and unskilled immigrants and on ties with developing and developed countries Results evidence two different network models: FDIs of UK, Germany and France are prompted by the ties of skilled immigrants, while those of Italy and Spain are only influenced by their respective diasporas The disparity may stem from history Differently from the findings of previous literature, the effects of networks with developing countries are similar to those with rich economies

Journal ArticleDOI
TL;DR: The authors examined the role of major trade languages in international trade and foreign direct investment (FDI) flows and found evidence of a hierarchy in transaction costs of major languages in both trade and FDI.
Abstract: We examine the roles of major trade languages in international trade and foreign direct investment (FDI) flows. Empirical results confirm that speaking a common language increases trade and FDI flows, yet the effect of major languages is more substantial in FDI than in international trade. In addition, we find evidence of a hierarchy in transaction costs of major languages in both trade and FDI.

Journal ArticleDOI
TL;DR: In this paper, the authors proposed an additional adaptation channel: current happiness may depend directly on past happiness, which amounts to assessing whether happiness is autoregressive, and run dynamic happiness regressions using individual-level panel data from the German Socio-economic Panel Study, the Japanese Panel Survey of Consumers, the British Household Panel Survey and the Swiss Household Panel.
Abstract: Affective habituation is well-documented in social sciences: people seem to adapt to many life events, ranging from lottery windfalls to terminal illnesses. A group of studies have tried to measure habituation by seeing how lagged values of life events affect present happiness. We propose an additional adaptation channel: current happiness may depend directly on past happiness, which amounts to assessing whether happiness is autoregressive. We run dynamic happiness regressions using individual-level panel data from the German Socio-Economic Panel Study, the Japanese Panel Survey of Consumers, the British Household Panel Survey and the Swiss Household Panel. As in previous studies, the coefficients on lagged events (e.g., becoming unemployed, getting married) suggest strong habituation. However, all the econometric models suggest that the coefficient on lagged happiness is positive and significant. We discuss whether this may be evidence of happiness having an inertial force (besides the usual habituation channel).

Journal ArticleDOI
TL;DR: In this paper, the authors used the ARDL approach to cointegration and found that the associations of suicide with sociological factors (divorce and fertility rates) were stronger than those with economic factors (per capita GDP and unemployment) for females.
Abstract: Japan has the highest suicide rates among the OECD countries and this public health problem seems to be accelerating in over the recent decades. Investigating and understanding the suicidal behaviour is of crucial importance to society and health policy makers. Such an investigation could provide with useful information for those responsible in formulating the national policies on suicide prevention. This study estimates dynamic econometric models for total, male and female suicides in Japan for the period of 1957–2009. Using the ARDL approach to cointegration, we find that the associations of suicide with sociological factors (divorce and fertility rates) were stronger than those with economic factors (per capita GDP and unemployment) for females.

Journal ArticleDOI
TL;DR: In this article, the authors estimate fixed-effects and Arellano-Bond GMM equations using panel data from a large group of developing countries and test whether trust-based social capital, proxied by contract-intensive money, complements the role of institutions in promoting development.
Abstract: We estimate fixed-effects and Arellano–Bond GMM equations using panel data from a large group of developing countries and test whether trust-based social capital, proxied by contract-intensive money, complements the role of institutions in promoting development. The results we obtain provide robust evidence that social capital enhances the contribution of institutions when we focus on political institutions and weaker evidence when we use civil liberties. Both social capital and institutions have positive effects on income but the relationships these variables have with income tend to be non-monotonic. Moreover, social capital has a positive influence on the effectiveness of human capital.

Journal ArticleDOI
TL;DR: The authors argue that increasing average incomes and stagnating levels of happiness do not constitute a paradox and that the effect of higher incomes has been more than counteracted by changes in other socioeconomic variables, notably the prevalence of marriage and divorce.
Abstract: This paper argues that increasing average incomes and stagnating levels of happiness, as observed in the United States since the 1970s, do not constitute a paradox. First, we show that the effect of higher incomes has been more than counteracted by changes in other socioeconomic variables, notably the prevalence of marriage and divorce. Second, we show that the effect of a given amount of real income on happiness has not changed between the 1970s and the early 2000s.

Journal ArticleDOI
TL;DR: In this paper, the authors model the QOL across countries as an unobservable latent link variable between observable causes and observable effects, which reduces the problem of bias, inconsistency, and arbitrary weightings of explanatory factors.
Abstract: Life expectancy, literacy rates, per capita income, mortality and morbidity statistics have been widely employed in empirical analyses to construct various indices of quality of life (QOL). The reason why so many indices of well-being exist in the literature is partly explained by the fact that such indices are sensitive to domains of QOL that are included in the measurement and how they are aggregated to arrive at a composite index. In this paper we model the QOL across countries as an unobservable latent link variable between observable causes and observable effects, which reduces the problem of bias, inconsistency, and arbitrary weightings of explanatory factors. We estimate and compare the QOL indices for 43 countries for the year 1999, noting differences between countries and varying role of various determinants of the QOL.

Journal ArticleDOI
TL;DR: In this article, a one-shot trust experiment with and without third party punishment (TPP) was conducted, where participants were recruited such that each session contained multiple people who are friends, family members, and unrelated villagers.
Abstract: This paper reports on a one-shot trust experiment with and without third party punishment (TPP). Participants were recruited such that each session contains multiple people who are friends, family members, and unrelated villagers. Participants were either paired with one of their reported family members, a friend or an unrelated villager. The design enables to (1) compare levels of trust and trustworthiness shown to family members vs. friends vs. unrelated villagers, (2) examine the propensity of third parties to punish selfish behaviour exhibited between friends, family members and villagers, and (3) examine the effect potential punishment has on trust and trustworthiness among family, friends and villagers. So far, microeconomic experiments have not investigated kinship in an anonymous way and also its relation to punishment is unknown. Experimental trust and trustworthiness varies between only 20% when playing with a villager and nearly 80% when matched with a family member. TPP significantly increases trust and trustworthiness in interactions among villagers and friends, but TPP is detrimental among family members.

Journal ArticleDOI
TL;DR: In this paper, the authors show that overall altruism is related to charity giving, but not to blood-donation behavior, and that only when investigating different facets of altruism separately can they link specific motives to specific behaviors.
Abstract: a b s t r a c t Economic theory provides a number of often complementary suggestions for modeling social motives related to altruistic behavior. Questionnaire research on altruism (Rushton et al., 1981) can enable iden- tification of "facets" of altruism. But can we match these facets with pro-social behavior, stated reasons for such behavior, and theoretical concepts for modeling altruism? In this paper, we show that such matching is possible and plausible. Our questionnaire results suggest that overall altruism is related to charity giving, but not to blood-donation behavior. Only when investigating different facets of altruism separately can we link specific motives to specific behaviors.

Journal ArticleDOI
TL;DR: The authors examined the relation between observer-ratings of attractiveness and skin tone, weight, and height, and provided evidence on whether these physical characteristics affect the likelihood that individuals report discriminatory treatment in a variety of contexts.
Abstract: This paper examines the relation between observer-ratings of attractiveness and skin tone, weight, and height, and provides evidence on whether these physical characteristics affect the likelihood that individuals report discriminatory treatment in a variety of contexts. African Americans with lighter color, and white men with darker color, are rated as more attractive, as are taller men and both men and women of normal weight. Although a vast literature indicates that physical appearance influences how one is treated, there is little evidence that perceived discriminatory treatment is related to physical characteristics such as attractiveness, weight, or height. An exception is for African Americans with lighter skin color who report less discriminatory treatment in daily activities and on the basis of color.

Journal ArticleDOI
TL;DR: In this article, the authors used data from the European Community Household Panel to analyse the impact on self-reported satisfaction from a number of economic and demographic variables and found a significant impact from the change in the individual income situation over the last year.
Abstract: Data in the European Community Household Panel are used to analyse the impact on self-reported satisfaction from a number of economic and demographic variables. The paper contributes to the ongoing discussion of the relationship between life satisfaction and income utilizing also the panel property of the data. We find an impact from the level of income only for a group of Southern European countries. For the same group of countries the difference between individual and average change in income has a significant impact on satisfaction. For all countries in the panel we find a significant impact from the change in the individual income situation over the last year. We find a strong impact from changes in labour force status and a strong negative impact on satisfaction from being unemployed and a somewhat weaker impact from being outside the labour force. Further, the level of and change in self-reported health has a strong impact on satisfaction.

Journal ArticleDOI
TL;DR: In this paper, the impact of a land certification program in Ethiopia on the level of interpersonal and institutional trust among households in the Amhara region is assessed. And the authors find that trust towards formal institutions is more responsive to the certification program than interpersonal trust.
Abstract: This paper assesses the impact of a land certification program in Ethiopia on the level of interpersonal and institutional trust among households in the Amhara region. The land certification program is designed to enhance land tenure security of farmers, by maintaining (egalitarian) status quo land distribution and equity concerns. The major contribution of the analysis lies in the exogenous nature of the program which addresses the endogeneity problems that characterize related studies, assessing the impact of policy related variables on trust. The effects of the land certification program on trust are identified both by the difference-in-difference approach and by non-parametrical analysis of average treatment effects. Overall trust is found to be enhanced by the certification program, with trust towards formal institutions being more responsive to the program than interpersonal trust. The major policy implication of the result is that trust could be invested on through policy changes regarding the economic betterment of societies.

Journal ArticleDOI
TL;DR: In this paper, a personal network survey is carried out to measure the individual social capital of borrowers, and four social capital variables between the respondent and his/her network members according to tie strength and social distance (bonding link /bridging link ).
Abstract: This paper analyses the effects of different forms of social capital on credit repayment behaviour. In the context of development economics an innovative data collection approach is used that originates from the field of sociology. A personal network survey is carried out to measure the individual social capital of borrowers. We distinguish four social capital variables between the respondent and his/her network members according to tie strength (bonding/bridging) and social distance (bonding link /bridging link ). The effects of social capital vary according to socio-cultural context. For instance, in Thailand bonding and in Vietnam bridging link social capital has a positive effect on loan repayment.

Journal ArticleDOI
TL;DR: Using subjective well-being survey data for Latin America, the authors presented evidence that both inflation and unemployment reduce wellbeing; where the cost of inflation in terms of unemployment, hence the relative size of the weights in a social wellbeing functions, is about one to eight, almost double of that found for OECD countries.
Abstract: Using subjective well-being survey data for Latin America, we present evidence that both inflation and unemployment reduce well-being; where the cost of inflation in terms of unemployment, hence the relative size of the weights in a social well-being functions, is about one to eight, almost double of that found for OECD countries. The trade-off, and therefore the misery index, differs across subgroups. For example, the young and left-leaning citizens are more concerned with unemployment than inflation.

Journal ArticleDOI
TL;DR: In this paper, a large sample of students was stratified into males and females and explored gender differences in two related questions: first, does Internet usage affect high school students’ absenteeism differently for males or females? Second, to what degree does the intensity of Internet use affect male versus female absenteeism?
Abstract: Considerable controversy surrounds the effects technologies such as the Internet have on human capital accumulation. We stratify a large sample of students into males and females and explore gender differences in two related questions: first, does Internet usage affect high school students’ absenteeism differently for males and females? Second, to what degree does the intensity of Internet use affect male versus female absenteeism? We utilize data from the National Survey on Drug Use and Health, which measures educational outcomes, Internet use and a host of other correlates. Poisson regression and probit results indicate that excessive Internet use increases absenteeism for high school students and gender differences are present.