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The Economic Impacts of Altruism, Trust and Reciprocity: An Experimental Approach to Social Capital

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  • MICHAEL R. CARTER

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  • Marco Castillo

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Abstract

This paper experimentally measures the 'social capital' of altruism, trust and reciprocity and empirically explores the impact of these norms on economic well-being. Using an experimental design that distinguishes trust and reciprocity from altruism, data were collected from individuals in a random sample of South African communities. Analyzed at the community level, these data suggest that while related, trust and reciprocity are clearly different from altruism. Moreover, the relatively strong correlation between trust and reciprocity indicates that communities are in a sort of normative equilibrium, with trust strongest where reciprocity norms are most active. Finally, analysis of household living standard data drawn from these same communities shows that these norms have real economic effects on households' well-being. The effects of both altruism and trust are significantly positive in urban communities, whereas the effects of these same norms are weaker or negative in more traditional rural areas.
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  • MICHAEL R. CARTER & Marco Castillo, 2002. "The Economic Impacts of Altruism, Trust and Reciprocity: An Experimental Approach to Social Capital," Wisconsin-Madison Agricultural and Applied Economics Staff Papers 448, Wisconsin-Madison Agricultural and Applied Economics Department.
  • Handle: RePEc:wop:wisaes:448
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    Cited by:

    1. Ashraf, Nava & Bohnet, Iris & Piankov, Nikita, 2003. "Is Trust a Bad Investment?," Working Paper Series rwp03-047, Harvard University, John F. Kennedy School of Government.
    2. Juan Camilo Cardenas & Jeffrey P. Carpenter, 2005. "Experiments and Economic Development: Lessons from Field Labs in the Developing World," Middlebury College Working Paper Series 0505, Middlebury College, Department of Economics.
    3. Baland, Jean-Marie & Bonjean, Isabelle & Guirkinger, Catherine & Ziparo, Roberta, 2016. "The economic consequences of mutual help in extended families," Journal of Development Economics, Elsevier, vol. 123(C), pages 38-56.
    4. Juan Camilo Cardenas & Jeffrey Carpenter, 2008. "Behavioural Development Economics: Lessons from Field Labs in the Developing World," Journal of Development Studies, Taylor & Francis Journals, vol. 44(3), pages 311-338.
    5. Tomomi Tanaka & Colin F. Camerer & Quang Nguyen, 2006. "Preferences, Poverty and Politics: Experimental and Survey Data from Vietnam," Levine's Bibliography 321307000000000054, UCLA Department of Economics.
    6. Binzel, Christine & Fehr, Dietmar, 2013. "Social distance and trust: Experimental evidence from a slum in Cairo," Journal of Development Economics, Elsevier, vol. 103(C), pages 99-106.
    7. Matteo M. Galizzi & Daniel Navarro Martinez, 2015. "On the external validity of social-preference games: A systematic lab-field study," Economics Working Papers 1462, Department of Economics and Business, Universitat Pompeu Fabra.
    8. Mauricio Armellini & Parantap Basu, 2010. "Altruism, Education Subsidy and Growth," EERI Research Paper Series EERI_RP_2010_21, Economics and Econometrics Research Institute (EERI), Brussels.
    9. Haile, Daniel & Sadrieh, Karim & Verbon, Harrie, 2006. "Cross-racial Envy and Underinvestment in South Africa," 2006 Annual meeting, July 23-26, Long Beach, CA 21269, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Christine Binzel & Dietmar Fehr, 2010. "Social Relationships and Trust," Working Papers 542, Economic Research Forum, revised 09 Jan 2010.
    11. Johansson-Stenman, Olof & Mahmud, Minhaj & Martinsson, Peter, 2013. "Trust, trust games and stated trust: Evidence from rural Bangladesh," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 286-298.
    12. Menachem Monnickendam & Yitzhak Berman, 2008. "An Empirical Analysis of the Interrelationship between Components of the Social Quality Theoretical Construct," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 86(3), pages 525-538, May.
    13. Qin, Xiangdong & Shen, Junyi & Meng, Xindan, 2011. "Group-based trust, trustworthiness and voluntary cooperation: Evidence from experimental and survey data in China," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 356-363, August.
    14. repec:eee:asieco:v:63:y:2019:i:c:p:44-74 is not listed on IDEAS
    15. Carpenter, Jeffrey P. & Daniere, Amrita G. & Takahashi, Lois M., 2004. "Cooperation, trust, and social capital in Southeast Asian urban slums," Journal of Economic Behavior & Organization, Elsevier, vol. 55(4), pages 533-551, December.
    16. Haddad, Lawrence James & Maluccio, John A., 2002. "Trust, membership in groups, and household welfare," FCND discussion papers 135, International Food Policy Research Institute (IFPRI).
    17. Ibanez, Marcela & Martinsson, Peter, 2008. "Can we do policy recommendations from a framed field experiment? The case of coca cultivation in Colombia," Working Papers in Economics 306, University of Gothenburg, Department of Economics.
    18. Cox, James C. & Orman, Wafa Hakim, 2015. "Trust and trustworthiness of immigrants and native-born Americans," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 57(C), pages 1-8.
    19. Tomomi Tanaka & Colin F Camerer & Quang Nguyen, 2006. "Poverty, politics, and preferences: Field Experiments and survey data from Vietnam," Levine's Bibliography 122247000000001099, UCLA Department of Economics.
    20. Chantarat, Sommarat & Oum, Sothea & Samphantharak, Krislert & Sann, Vathana, 2019. "Natural Disasters, Preferences, and Behaviors: Evidence from the 2011 Mega Flood in Cambodia," Journal of Asian Economics, Elsevier, vol. 63(C), pages 44-74.
    21. Cox, James C. & Orman, Wafa Hakim, 2010. "Immigrant Assimilation, Trust and Social Capital," IZA Discussion Papers 5063, Institute of Labor Economics (IZA).
    22. Haile, Daniel & Sadrieh, Karim & Verbon, Harrie, 2006. "Cross-racial Envy and Underinvestment in South Africa," 2006 Annual meeting, July 23-26, Long Beach, CA 21269, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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