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The Relevance of Social Norms for Economic Efficiency: Theory and its Empirical Test

Author

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  • Anil Alpman

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper proposes a new theory of social norms that explores the relation between individuals' income, time allocation decisions, and consumption choices on the one hand, and the determinants of individuals' decision to conform or not to social norms on the other. It is shown that rational consumers may obey inefficient social norms, which in turn would slow economic development. An empirical test of the model is performed for different categories of countries using the World Values Survey, a voluminous cross-country micro dataset. The results yield the gain and the cost of disobeying inefficient social norms, the latter of which can be used as an indicator of social pressure regarding conformity.

Suggested Citation

  • Anil Alpman, 2013. "The Relevance of Social Norms for Economic Efficiency: Theory and its Empirical Test," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00824880, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00824880
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00824880v2
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    References listed on IDEAS

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    1. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 715-753.
    2. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, Oxford University Press, vol. 94(4), pages 749-775.
    3. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
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