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Is there more than one linkage between Social Network and Inequality?

  • D'Angelo, Emanuela

    (Universita Politecnica, delle Marche, Ancona, Italy)

  • Lilla, Marco

    (Universita Politecnica, delle Marche, Ancona, Italy)

The paper aims to analyse how income inequality affects social networks strength in fourteen European Countries. We introduce some new evidences by using the ECHP for testing the networks-inequality nexus and being able to construct directly inequality indices from the microdata as well their decomposition. In particular, we focus on two main point: firstly, we analyse how total income inequality could be related to social network; secondly, we introduce the "clustered network" definition, by decomposing total income inequality based on the education level. We test the existence of a pluralism linkage between Social Network and Inequality and many results confirm that the linkage is neither unambiguous nor unidirectional. We introduce and stress some important issue. First, we use di erent levels of social network: narrow, wide and anonymous; second, we use different inequality indexes (different sensitiveness to changes at different part of the income distribution); third, the ambiguous linkage could be explained on one hand by the positive role of emulation and reciprocity behaviors and on the other hand by negative ones of the envy, amoral familism and keeping up with the Joneses mechanisms. Finally, we stress the different roles of within and between components of inequality. Our idea is that higher income inequality - related to the changing education premia - could affect social network formation among individuals through two different channels: higher inequality among di erent educated ind ividuals could raise (clustered networks), while higher inequality among similars could halt the social networks.

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Paper provided by IRISS at CEPS/INSTEAD in its series IRISS Working Paper Series with number 2007-12.

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Date of creation: Nov 2007
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Handle: RePEc:irs:iriswp:2007-12
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  1. Brañas Garza, Pablo & Espinosa Alejos, María Paz, 2006. "Altruism with Social Roots: An Emerging Literature," DFAEII Working Papers 2006-07, University of the Basque Country - Department of Foundations of Economic Analysis II.
  2. Samuel Bowles & Yongjin Park, 2005. "Emulation, Inequality, and Work Hours: Was Thorsten Veblen Right?," Economic Journal, Royal Economic Society, vol. 115(507), pages F397-F412, November.
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  7. Justina A.V. Fischer & Benno Torgler, 2007. "Social Capital and Relative Income Concerns: Evidence from 26 Countries," CREMA Working Paper Series 2007-05, Center for Research in Economics, Management and the Arts (CREMA).
  8. Andrew Leigh, 2006. "Trust, Inequality, and Ethnic Heterogeneity," CEPR Discussion Papers 511, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  9. Jonathan Temple & Paul A. Johnson, 1998. "Social Capability And Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 965-990, August.
  10. Piketty, Thomas, 2000. "Theories of persistent inequality and intergenerational mobility," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 8, pages 429-476 Elsevier.
  11. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
  12. Rolf Aaberge & Steinar Bjerve & Kjell Doksum, 2005. "Decomposition of rank-dependent measures of inequality by subgroups," Metron - International Journal of Statistics, Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, vol. 0(3), pages 493-503.
  13. Alesina, Alberto F & La Ferrara, Eliana, 2000. "Who Trusts Others?," CEPR Discussion Papers 2646, C.E.P.R. Discussion Papers.
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  19. repec:ebl:ecbull:v:4:y:2003:i:7:p:1-6 is not listed on IDEAS
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  25. Paldam, Martin, 2000. " Social Capital: One or Many? Definition and Measurement," Journal of Economic Surveys, Wiley Blackwell, vol. 14(5), pages 629-53, December.
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