Social Interactions in Growing Bananas

Abstract

In an environment of strongly decreasing banana productivity, we analyse whether an increase in the average productivity of a reference group a farmer belongs to, has a positive effect on that individual farmer’s harvest. The increase in average productivity is supposedly caused by the adoption of productivity enhancing techniques. So we measure the externalities of a productivity increase in one farmer’s banana field. For our analysis we have data on three social groups, namely kinship members, neighbours and social insurance group members. We find the strongest social effects within kinship related groups. We do find exogenous social effects between neighbours: there is a positive effect of neighbours’ education level. But only within kinship related groups we find the true endogenous effects that produce the social multiplier in banana productivity.