The Social Multiplier

In many cases, aggregate data is used to make inferences about individual level behavior. If there are social interactions in which one person’s actions influence his neighbor’s incentives or information, then these inferences are inappropriate. The presence of positive social interactions, or strategic complementarities, implies the existence of a social multiplier where aggregate relationships will overstate individual elasticities. We present a brief model and then estimate the size of the social multiplier in three areas: the impact of education on wages, the impact of demographics on crime and group membership among Dartmouth roommates. In all three areas there appears to be a significant social multiplier.

The Social Multiplier

In many cases, aggregate data is used to make inferences about individual level behavior. If there are social interactions in which one person's actions influence his neighbor's incentives or information, then these inferences are inappropriate. The presence of positive social interactions, or strategic complementarities, implies the existence of a social multiplier where aggregate relationships will overstate individual elasticities. We present a brief model and then estimate the size of the social multiplier in three areas: the impact of education on wages, the impact of demographics on crime and group membership among Dartmouth roommates. In all three areas there appears to be a significant social multiplier.

Measuring Trust

We combine two experiments and a survey to measure trust and trustworthiness—two key components of social capital. Standard attitudinal survey questions about trust predict trustworthy behavior in our experiments much better than they predict trusting behavior. Trusting behavior in the experiments is predicted by past trusting behavior outside of the experiments. When individuals are closer socially, both trust and trustworthiness rise. Trustworthiness declines when partners are of different races or nationalities. High status individuals are able to elicit more trustworthiness in others.Economic

Why It Is Hard to Find Genes Associated With Social Science Traits: Theoretical and Empirical Considerations

OBJECTIVES: We explain why traits of interest to behavioral scientists may have a genetic architecture featuring hundreds or thousands of loci with tiny individual effects rather than a few with large effects and why such an architecture makes it difficult to find robust associations between traits and genes. METHODS: We conducted a genome-wide association study at 2 sites, Harvard University and Union College, measuring more than 100 physical and behavioral traits with a sample size typical of candidate gene studies. We evaluated predictions that alleles with large effect sizes would be rare and most traits of interest to social science are likely characterized by a lack of strong directional selection. We also carried out a theoretical analysis of the genetic architecture of traits based on R.A. Fisher's geometric model of natural selection and empirical analyses of the effects of selection bias and phenotype measurement stability on the results of genetic association studies. RESULTS: Although we replicated several known genetic associations with physical traits, we found only 2 associations with behavioral traits that met the nominal genome-wide significance threshold, indicating that physical and behavioral traits are mainly affected by numerous genes with small effects. CONCLUSIONS: The challenge for social science genomics is the likelihood that genes are connected to behavioral variation by lengthy, nonlinear, interactive causal chains, and unraveling these chains requires allying with personal genomics to take advantage of the potential for large sample sizes as well as continuing with traditional epidemiological studies.EconomicsPsycholog

Civil conflict, federalism and strategic delegation of leadership

This article analyzes negative externalities that policymakers in one region or group may impose upon the citizens of neighboring regions or groups. These externalities may be material, but they may also be psychological (in the form of envy). The latter form of externality may arise from the production of 'conspicuous' public goods. As a result, decentralized provision of conspicuous public goods may be too high. Potentially, a centralized legislature may internalize negative externalities. However, in a model with strategic delegation, we argue that the median voter in each jurisdiction may anticipate a reduction in local public goods supply and delegate to a policymaker who cares more for public goods than she does herself. This last effect mitigates the expected benefits of policy centralization. The authors' theory is then applied to the setting of civil conflict, where they discuss electoral outcomes in Northern Ireland and Yugoslavia before and after significant institutional changes that affected the degree of centralization. These case studies provide support for the authors' theoretical predictions

The Promises and Pitfalls of Genoeconomics

This article reviews existing research at the intersection of genetics and economics, presents some new findings that illustrate the state of genoeconomics research, and surveys the prospects of this emerging field. Twin studies suggest that economic outcomes and preferences, once corrected for measurement error, appear to be about as heritable as many medical conditions and personality traits. Consistent with this pattern, we present new evidence on the heritability of permanent income and wealth. Turning to genetic association studies, we survey the main ways that the direct measurement of genetic variation across individuals is likely to contribute to economics, and we outline the challenges that have slowed progress in making these contributions. The most urgent problem facing researchers in this field is that most existing efforts to find associations between genetic variation and economic behavior are based on samples that are too small to ensure adequate statistical power. This has led to many false positives in the literature. We suggest a number of possible strategies to improve and remedy this problem: (a) pooling data sets, (b) using statistical techniques that exploit the greater information content of many genes jointly, and (c) focusing on economically relevant traits that are most proximate to known biological mechanisms.EconomicsSociolog

Ethnic Concentration, Cultural Identity and Immigrant Self-Employment in Switzerland

Immigrant self-employment rates vary considerably across regions in Switzerland. Business ownership provides an alternative to wage labour, where immigrants have to face structural barriers such as the limited knowledge of the local language, or difficulties in fruitfully making use of their own human capital. Despite their historically high unemployment rates with respect to natives, immigrants in Switzerland are less entrepreneurial. It is therefore important to uncover factors that may facilitate the transition from the status of immigrant to the one of economic agent. Among others factors, concentration in ethnic enclaves, as well as accumulated labour market experience and time elapsed since immigration, have been associated to higher business ownership rates. In this paper, we use a cross-section of 2,490 Swiss municipalities in order to investigate the role played by the ethnic concentration of immigrants, as well as cultural factors, in determining self-employment rates