Social Capital as a Building Block of a Developed Economy: Evidence from the United States

We determine the effect of individual social capital on income in the United States. We use data from the General Social Survey and separate individuals into three different occupation groups: occupations who require continual usage of social capital, such as carpenters and plumbers; occupations with one time usage of social capital, such finding the job; and farming jobs. We find that social capital has a positive effect on all types of incomes, though only find significant results for \desk jobs", with a 20% effect of social capital on income. This number is consistent with findings for other countries with different types of social capital mechanisms.Institutional and Behavioral Economics,

Communication, home bias and social capital

This dissertation consists of three essays on the effects of communication, home bias and social capital. The first study analyzes three different laboratory treatments that determine if policies that introduce and improve communication are beneficial to a market. The control treatment has no communication. Then, two different types of communication mechanisms are introduced: cheap communication, where subjects are able to lie, and truthful communication, where only honest messages may be sent. The results demonstrate that truthful communication dramatically improves subjects\u27 ability to trade efficiently, ultimately leading to higher social surplus and lower income inequalities. Cheap communication does not produce the same results: it does not lead to changes in overall efficiency, although it lowers income inequality by decreasing seller incomes. The results have implications for the development and improvement of communication forums designed to ease and improve trading outcomes.^ The second study reports the results from a laboratory experiment on local trade in the presence of foreign comparative advantage. The treatments simulate the effects of policies designed to improve local trade by introducing two types of policies: a reduction of the attractiveness of the foreign market, and the introduction of communication (cheap or truthful) to the local market. I find that only an implementation of both policies has a significant effect on local trade and efficiency. The results have implications for the development and drive toward a stronger local economy, demonstrating that successful policies require a large amount of resources to be viable.^ In the third study, I determine whether social capital has a beneficial effect on income in the United States, and whether the magnitude of this effect varies by type of occupation using data from the General Social Survey. I find that social capital, measured by voluntary associations, is correlated with higher incomes, but that not all social capital is created equal. Specifically, fraternal, service, sport and professional memberships are correlated with higher incomes. On the other hand, school, literature and church memberships are correlated to lower incomes, while the rest do not have a statistically significant relation to individual income. Because of the endogenous nature of social capital, I use an instrumental variable to explore the causal effect of higher social capital on income. Using trust in strangers as an instrument, I find that higher levels of social capital cause a rise in individual income

Communication, home bias and social capital

This dissertation consists of three essays on the effects of communication, home bias and social capital. The first study analyzes three different laboratory treatments that determine if policies that introduce and improve communication are beneficial to a market. The control treatment has no communication. Then, two different types of communication mechanisms are introduced: cheap communication, where subjects are able to lie, and truthful communication, where only honest messages may be sent. The results demonstrate that truthful communication dramatically improves subjects\u27 ability to trade efficiently, ultimately leading to higher social surplus and lower income inequalities. Cheap communication does not produce the same results: it does not lead to changes in overall efficiency, although it lowers income inequality by decreasing seller incomes. The results have implications for the development and improvement of communication forums designed to ease and improve trading outcomes. The second study reports the results from a laboratory experiment on local trade in the presence of foreign comparative advantage. The treatments simulate the effects of policies designed to improve local trade by introducing two types of policies: a reduction of the attractiveness of the foreign market, and the introduction of communication (cheap or truthful) to the local market. I find that only an implementation of both policies has a significant effect on local trade and efficiency. The results have implications for the development and drive toward a stronger local economy, demonstrating that successful policies require a large amount of resources to be viable. In the third study, I determine whether social capital has a beneficial effect on income in the United States, and whether the magnitude of this effect varies by type of occupation using data from the General Social Survey. I find that social capital, measured by voluntary associations, is correlated with higher incomes, but that not all social capital is created equal. Specifically, fraternal, service, sport and professional memberships are correlated with higher incomes. On the other hand, school, literature and church memberships are correlated to lower incomes, while the rest do not have a statistically significant relation to individual income. Because of the endogenous nature of social capital, I use an instrumental variable to explore the causal effect of higher social capital on income. Using trust in strangers as an instrument, I find that higher levels of social capital cause a rise in individual income

Organic Dairy and Beef Producers Face Limited Markets, Feed Grain Shortages

Despite increasing U.S. consumer demand for organic animal products such as meat and milk, the total market share of organically certified animals, as well as of organic forage and feed concentrates, remained low between 2008 and 2019 compared with total herds and acreage. In 2019, organic dairy cows accounted for 3.6 percent of the total dairy herd, and organic corn for grain accounted for 0.4 percent of total corn for grain harvested acreage. By comparison, 9.5 percent of harvested vegetable acres were cultivated organically in 2019 (the most recent year for which complete data are available)

Organic Mushroom Production Concentrated in Pennsylvania

Sales and the retail market share of organic mushrooms have risen in the last decade, and U.S. farmers—especially in Pennsylvania—have increased organic mushroom production to accommodate growing consumer demand. In 2009, organic mushrooms accounted for 2 percent of the total retail mushroom market, a share that grew to 11 percent by 2021. Organic mushroom production increased from 17 million pounds in the marketing year 2009/10 (July–June) to 114 million pounds of mushrooms that were certified organic during the 2022/23 growing season. Mushrooms generally are grown indoors, under glass or in a controlled environment, so natural soil and temperature conditions may not matter in deciding where they are grown. In the United States, the leading producer of mushrooms—organic as well as conventional—is Pennsylvania, followed by California. Pennsylvania has been a major producer of mushrooms since the 1880s, and today its growers have developed specialized knowledge and housing equipped with proper ventilation needed for extensive mushroom production

Social Capital as a Building Block of a Developed Economy: Evidence from the United States

We determine the effect of individual social capital on income in the United States. We use data from the General Social Survey and separate individuals into three different occupation groups: occupations who require continual usage of social capital, such as carpenters and plumbers; occupations with one time usage of social capital, such finding the job; and farming jobs. We find that social capital has a positive effect on all types of incomes, though only find significant results for \desk jobs", with a 20% effect of social capital on income. This number is consistent with findings for other countries with different types of social capital mechanisms

USDA Created Organic Assistance Programs From 2021–23 in Response to Disruptions, Decreased Organic Transitioning Acreage

U.S. agriculture has been affected by unexpected events over the past few years, including the Coronavirus (COVID-19) pandemic, drought, the war in Ukraine, and high inflation. Organic commodity producers were further affected by lost markets, labor shortages, and difficulty obtaining or renewing their organic certification. In 2021, the USDA, National Agricultural Statistics Service recorded an 11-percent decrease in certified organic land and an 18-percent decrease in land transitioning to organic compared with 2019. Additionally, the number of producers who reported they would be decreasing or discontinuing organic production increased to 8 percent from 6 percent during that time

Is investing in communication worth it? An experimental study of communication in a relational contract setting

Many markets include communication forums (e.g. Angie's List for services, Yelp for restaurants) to facilitate trading between buyers and sellers. Some market-makers go beyond creating forums and make investments to improve the quality of communication platforms, such as by recruiting “elite” yelp members or Amazon Vine Program reviewers, in order to introduce more truthful reviews. We conduct an experiment in order to examine who benefits from providing communication forums and under what conditions should a market-maker invest in better communication. When third-party enforcement for quality is unavailable, theory predicts that communication will be especially important to facilitate reputation incentives to substitute for lack of contract enforceability. In our control treatment, buyers and sellers trade using imperfectly enforced contracts with no communication between the parties. Then we introduce two treatments with structured communication where subjects can endogenously choose to send pre-selected messages about their transaction (e.g. “the seller did not deliver desired quality”). We allow for two different types of communication: (a) send any pre-selected message regardless of trading outcomes, or (b) only send truthful messages. Our results show that compared to the control treatment, the addition of unverified communication does not have a significant impact on efficiency or social surplus, perhaps due to seller dishonesty in the communication system. Income distribution becomes more equitable, however, suggesting that unverified communication is an overall beneficial tool for development. We also find that there is much to gain from investments in improving communication over simply providing an opportunity for communication. Verifiable communication yields large increases in efficiency, and social surplus. It also alleviates, albeit mildly, income inequalities between buyers and sellers