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

  • Lederman, Daniel

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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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
Date of revision:
Handle: RePEc:wbk:wbrwps:2821
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  1. Ribar, D., 1991. "Teenage Fertility and High Scholl Completion," Papers 10-91-2, Pennsylvania State - Department of Economics.
  2. Narayan, Deepa & Pritchett, Lant, 1999. "Cents and Sociability: Household Income and Social Capital in Rural Tanzania," Economic Development and Cultural Change, University of Chicago Press, vol. 47(4), pages 871-97, July.
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  4. Hassan, Rashid M., 1996. "Planting strategies of maize farmers in Kenya: a simultaneous equations analysis in the presence of discrete dependent variables," Agricultural Economics, Blackwell, vol. 15(2), pages 137-149, November.
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  6. 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.
  7. 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.
  8. Alberto Alesina & Eliana La Ferrara, . "Participation in Heterogeneous Communities," Working Papers 151, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  9. John F. Helliwell & Robert D. Putnam, 2007. "Education and Social Capital," Eastern Economic Journal, Eastern Economic Association, vol. 33(1), pages 1-19, Winter.
  10. 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.
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  12. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
  13. Durlauf,S.N., 1999. "The case "against" social capital," Working papers 29, Wisconsin Madison - Social Systems.
  14. DiPasquale, Denise & Glaeser, Edward L., 1999. "Incentives and Social Capital: Are Homeowners Better Citizens?," Journal of Urban Economics, Elsevier, vol. 45(2), pages 354-384, March.
  15. Hassan, Rashid M., 1996. "Planting strategies of maize farmers in Kenya: a simultaneous equations analysis in the presence of discrete dependent variables," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 15(2), November.
  16. repec:oup:qjecon:v:112:y:1997:i:4:p:1251-88 is not listed on IDEAS
  17. Schiff, Maurice, 1999. "Labor market integration in the presence of social capital," Policy Research Working Paper Series 2222, The World Bank.
  18. Alberto Alesina & Eliana La Ferrara, 2000. "The Determinants of Trust," NBER Working Papers 7621, National Bureau of Economic Research, Inc.
  19. 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.
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