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Income, wealth, and socialization in Argentina : provocative responses from individuals

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  • Lederman, Daniel

Abstract

focuses on two objectives in his study: (1) to establish a baseline measurement of the level and geographic distribution of social capital in Argentina, and (2) to identify its empirical determinants. The study's survey questionnaire provides individual-level data on the population's participation in social organizations and willingness to trust members of its community. Probit models are estimated to explain the individual's decision to participate and to trust strangers, and individual-household and community characteristics are used as explanatory variables. Potential simultaneity and endogeneity problems afflicting the empirical models are examined. The main determinants of the probability of participation in Argentina are age, age squared, household income (and perhaps income squared), rural communities (perhaps due to lower probabilities of migration among rural residents since most migrants live in urban centers), community or provincial unemployment rates, and individual trust. In contrast, the main determinants of trust are age and age squared (but with opposite signs to those exhibited by probability of participation), household wealth (but not its squared term nor household income), participation (as shown by the Seemingly Unrelated Regressions Probit results on the cross-correlation between the two social capital models), and community or provincial unemployment rates and income inequality. It is noteworthy that the common question on trust used in the U.S. General Social Survey and in the World Values Survey yields results whereby communities with higher"trust"rates actually have lower social participation rates. Finally, participation in organizations with participatory leadership selection mechanisms are more likely to produce interpersonal trust than other forms of participation.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2821.

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Date of creation: 30 Apr 2002
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Handle: RePEc:wbk:wbrwps:2821

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Keywords: Economic Theory&Research; Decentralization; Health Economics&Finance; Social Capital; Community Development and Empowerment; Social Capital; Community Development and Empowerment; Economic Theory&Research; Health Economics&Finance; Poverty Assessment;

References

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  1. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2000. "The Role of Social Capital in Financial Development," NBER Working Papers 7563, National Bureau of Economic Research, Inc.
  2. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2001. "The Economic Approach to Social Capital," Harvard Institute of Economic Research Working Papers 1916, Harvard - Institute of Economic Research.
  3. Alberto Alesina & Eliana La Ferrara, . "Participation in Heterogeneous Communities," Working Papers 151, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  4. Edward L. Glaeser & David Laibson & Jose A. Scheinkman & Christine L. Soutter, 1999. "What is Social Capital? The Determinants of Trust and Trustworthiness," NBER Working Papers 7216, National Bureau of Economic Research, Inc.
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  11. Lederman, Daniel & Loayza, Norman & Menendez, Ana Maria, 2002. "Violent Crime: Does Social Capital Matter?," Economic Development and Cultural Change, University of Chicago Press, vol. 50(3), pages 509-39, April.
  12. Schiff, Maurice, 1999. "Labor market integration in the presence of social capital," Policy Research Working Paper Series 2222, The World Bank.
  13. Edward C. Norton & Richard C. Lindrooth & Susan T. Ennett, 1998. "Controlling for the endogeneity of peer substance use on adolescent alcohol and tobacco use," Health Economics, John Wiley & Sons, Ltd., vol. 7(5), pages 439-453.
  14. Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
  15. Newey, Whitney K., 1987. "Efficient estimation of limited dependent variable models with endogenous explanatory variables," Journal of Econometrics, Elsevier, vol. 36(3), pages 231-250, November.
  16. Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
  17. Hassan, Rashid M., 1996. "Planting strategies of maize farmers in Kenya: a simultaneous equations analysis in the presence of discrete dependent variables," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 15(2), November.
  18. Alberto Alesina & Eliana La Ferrara, 2000. "The Determinants of Trust," NBER Working Papers 7621, National Bureau of Economic Research, Inc.
  19. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
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