Inequality, networks and distributive decisions: A field experiment

Ben D’ExelleUniversity of Antwerp - IOBMaastricht University

Arno RiedlMaastricht University

ESA – World Meeting

Rome, June 30, 2007

What determines “giving” in small-scale (“face-to-face”) societies :

Social networks: social distance, network structure, individual position within networks

Individual characteristics of community members (economic variables, sex, age, education, etc.)

Correlation between both dimensions? Use of a dictator game experiment,

complemented with survey data on individual characteristics and social networks

Research questions

Literature references

Social networks and dictator game giving: Leider, Mobius, Rosenblat & Do (2006): dictators

give 50% more to friends than to strangers

Goeree, McConnell, Mitchell, Tromp & Yariv (2006): Distance in networks lowers giving

Brañas-Garza, Cobo-Reyes, Paz Espinosa, Jiménez & Ponti (2006): Social integration (betweenness) increases giving.

Experimental design & procedures

What is new about our experiment:1. Large heterogeneity: rural village where

poverty and inequality are highly present (economic inequality; sex; education; age)

2. Multiple relations: details on the type of relation (15 types)

Dictator game (divide 20 coins of 1 c$) with 1 stranger and 5 different (randomly selected) village members; max. earnings = two days income (6.7$) Minimizing reciprocity by one-way anonymity: only

dictator knows the identity of the recipient Decentralized setup: individual visits (lower self-

selection; lower public exposure; no communication) Reduce experimenter-effect: use of rings (to maintain

weight of boxes) + sealing of boxes + recording of decisions by supervisor

First, the networks (trust-building with participants); then, the experiment in one day (to limit contagion)

Experimental design & procedures

Experimental design & procedures

Results

Variable Obs Mean Std. Dev. Min Max Median

1 285 9.6 4.58 0 20 102 285 0.4 4.63 -15 16 0

21

0

10

20

30

Pe

rcen

t

0 5 10 15 20

Coins to recipient

0

10

20

30

-20 -10 0 10 20

Pe

rce

nt

Coins to recipient - coins to stranger

Economic resources (between subject analysis)

No YesThe household of the dictator has land?

0

2

4

6

8

10

12

Co

ins

to s

tran

ger

(m

ean

)

N = 38 N = 19

Sign. = 0.297

No YesThe household of the dictator has cattle?

0

2

4

6

8

10

12

Co

ins

to s

tran

ger

(m

ean

)

N = 31 N = 26

Sign. = 0.064*

Procedure to study social relations

Measuring social networks: Use of small cards, each representing a

household (on each card the names of both husband and wife)

Do you know the household? (93.5% of all possible dyads)

Do you have a social relation with one of its members?

Give details on the type of relation (e.g. land, labor, mutual support, family, religion, neighbor, etc.).

Completeness of networks: 100 out of 123 adults (81.3%)

Analyzing social networks: Only household heads. Other members were rarely

mentioned. Members of the same household are always linked

whatever the type of relation we are looking at. OR-networks: we symmetrized the adjacency

matrix. We took the maximum value and missing values were eliminated by the non-missing value in the other direction.

Few missing values remained (3.5%); conversion into zeros.

Procedure to study social relations

Mutual support network in the village (N = 123)

density = 0.0321 (matrix average);

mean degree = 3.919 (3.754);

freeman’s graph centralization measure = 21.73%

Social distance (general relation)

distance 1 distance 2General relation (distance)

-0,25

0

0,25

0,5

0,75

1

1,25

Co

ins

to r

ecip

ien

t -

coin

s to

str

ang

er (

mea

n)

N = 114 N = 170

Sign. = 0.031**

Coef. S.E.

Sex of the dictator (1 = male; 0 = female)

Land: dictator yes; recipient yes (dummy)

Land: dictator yes; recipient no (dummy)

Land: dictator no; recipient yes (dummy)

Distance

Size of ego-network (dictator)

Number of ties in ego-network (dictator)

Power (Bonacich; neg. beta)

Number of decision (min. = 1; max. = 5)

Constant

Dep. var. = coins to recipient

General relation

Coef. S.E.

Sex of the dictator (1 = male; 0 = female) 2.049 0.046**

Land: dictator yes; recipient yes (dummy) 1.719 0.130

Land: dictator yes; recipient no (dummy) 1.501 0.170

Land: dictator no; recipient yes (dummy) -0.289 0.503

Distance

Size of ego-network (dictator)

Number of ties in ego-network (dictator)

Power (Bonacich; neg. beta)

Number of decision (min. = 1; max. = 5) -0.182 0.097

Constant 8.760 0.000***

R-squared 0.070

Number of observations 280

Dep. var. = coins to recipient

General relation

Coef. S.E.

Sex of the dictator (1 = male; 0 = female) 3.147 1.028***

Land: dictator yes; recipient yes (dummy) 2.200 1.098**

Land: dictator yes; recipient no (dummy) 2.185 1.056**

Land: dictator no; recipient yes (dummy) -0.240 0.431

Distance -1.000 0.364***

Size of ego-network (dictator) -10.309 4.382**

Number of ties in ego-network (dictator) 0.001 0.004

Power (Bonacich; neg. beta) 10.731 4.584**

Number of decision (min. = 1; max. = 5) -0.173 0.107

Constant 13.820 3.344***

R-squared 0.1512

Number of observations 280

Dep. var. = coins to recipient

General relation Mutual support

Coef. S.E. Coef. S.E.

Sex of the dictator (1 = male; 0 = female) 3.147 1.028*** 2.427 1.026**

Land: dictator yes; recipient yes (dummy) 2.200 1.098** 0.803 1.218

Land: dictator yes; recipient no (dummy) 2.185 1.056** 0.595 1.150

Land: dictator no; recipient yes (dummy) -0.240 0.431 -0.287 0.435

Distance -1.000 0.364*** 0.408 0.801

Size of ego-network (dictator) -10.309 4.382** -0.094 0.803

Number of ties in ego-network (dictator) 0.001 0.004 0.295 0.118**

Power (Bonacich; neg. beta) 10.731 4.584** -0.336 0.853

Number of decision (min. = 1; max. = 5) -0.173 0.107 -0.184 0.111*

Constant 13.820 3.344*** 9.270 1.058***

R-squared 0.1512 0.1426

Number of observations 280 280

Dep. var. = coins to recipient

Conclusions

Networks matter for dictator giving But, it depends on the networks you look at General relation:

Distance and Bocanich centrality Mutual support:

Ties within the ego-network (norm-based behaviour)

Sex and economic variables remain important, when controlling for networks

Multivariate analysisRegression on coins left to recipient

Sex of the dictator (1 = male; 0 = female) 2.049 1.025** 2.395 1.023** 3.186 0.994***

Land: dictator yes; recipient yes (dummy) 1.719 1.136 0.872 1.168 2.197 1.093**

Land: dictator yes; recipient no (dummy) 1.501 1.093 0.670 1.106 2.183 1.048**

Land: dictator no; recipient yes (dummy) -0.289 0.431 -0.296 0.434 -0.236 0.429

Size of ego-network (mutual support; dictator) -0.392 0.208*

Number of ties in ego-network (mutual support; dictator) 0.311 0.110***

Relation (whatever type; distance) -1.001 0.364***

Power (whatever type; Bonacich; Beta > 0) -4.849 2.131**

Power (whatever type; Bonacich; Beta < 0) 5.294 2.320**

Number of decision (min. = 1; max. = 5) -0.182 0.110* -0.181 0.110 -0.173 0.107

Constant 8.760 0.896*** 9.441 1.030*** 13.359 2.314***

R-squared 0.0704 0.1395 0.1504

Number of observations 280 280 280

Wald chi2 9.19 27.04 30.86

Prob > chi2 0.1018 0.0003 0.0001

Model 1 Model 2 Model 3

Random effects (panel model); robust standard errors

Mutual support networks

1 2 3 4 5 6 7 8 inf.

Mutual support (distance)

0

20

40

60

80

100

Cu

mu

lati

ve P

erce

nt

Both cattle

One cattle

None cattle

Cattle and mutual support

0%

20%

40%

60%

80%

100%

120%

0 1 2 3-4 ≥ 5

Degree centrality

HH has cattle HH does not have cattle

Distance Centrality

Coef. S.E Sig. Coef. S.E Sig.

Sex of the dictator (1 = male; 0 = female) 4.273 1.012 0.000*** 4.272 0.900 0.000***

Relation (whatever type; distance) -0.998 0.451 0.031** -0.963 0.361 0.008***

Centrality (whatever type of relation; Bonacich) -6.383 2.055 0.003*** -6.373 2.030 0.002***

Power (whatever type of relation; Bonacich) 6.945 2.253 0.003*** 6.935 2.214 0.002***

Size of ego-network (mutual support; dictator) -0.405 0.179 0.027** -0.405 0.178 0.023**

Number of ties in ego-network (mutual support; dictator) 0.311 0.096 0.002*** 0.311 0.092 0.001***

Number of aid projects the hh of the dictator works with 1.534 0.517 0.004*** 1.534 0.465 0.001***

Number of decision (min. = 1; max. = 5) -0.165 0.104 0.117 -0.165 0.105 0.115

Constant 14.757 1.883 0.000*** 14.684 2.049 0.000***

R-squared 0.2929 0.2929

Number of observations 285 285

F 6.81 Wald chi2 663.17

Prob > F 0.0000 Prob > chi2 0.0000

OLS (robust st.errors) Panel model (rob. s.e.)

Multivariate analysis

Regression on number of coins left to recipient

Correlation between networks and individual characteristics

Possible correlation between networks and individual characteristics (economic assets, sex, age, etc.)

Most important networks that may be influenced by individual characteristics are mutual support relations, economic relations (any kind of economic transaction) and friendship relations

Procedure to analyze individual social relations: We only took account of the household heads. People only

very occasionally mentioned other household members. Second, members of the same households are always

linked whatever the type of relation we are looking at. We symmetrized the resulting adjacency matrix. For each

dyad in each of both directions, we took the maximum value and missing values were eliminated by the non-missing value in the other direction.

After this only a limited number of missing values remained, which we converted into zeros.

Most important networks that may be influenced by individual characteristics are friendship relations and mutual support relations

Network formation:

Multivariate analysis

Coef. S.E Sig. Coef. S.E Sig.

Sex of the dictator (1 = male; 0 = female) 3.528 1.001 0.000*** 3.186 0.994 0.001***

Relation (whatever type; distance) -1.010 0.362 0.005*** -1.001 0.364 0.006***

Centrality (whatever type of relation; Bonacich) -4.547 2.098 0.030** -4.849 2.131 0.023**

Power (whatever type of relation; Bonacich) 4.957 2.287 0.030** 5.294 2.32 0.023**

Size of ego-network (mutual support; dictator) -0.435 0.203 0.032** -- -- --

Number of ties in ego-network (mutual support; dictator) 0.309 0.108 0.004*** -- -- --

Land: dictator yes; recipient yes (dummy) 1.381 1.143 0.227 2.197 1.092 0.044**

Land: dictator yes; recipient no (dummy) 1.378 1.077 0.201 2.183 1.048 0.037**

Land: dictator no; recipient yes (dummy) -0.248 0.429 0.563 -0.236 0.429 0.582

Number of decision (min. = 1; max. = 5) -0.172 0.108 0.109 -0.173 0.107 0.106

Constant 14.347 2.249 0.000*** 13.359 2.314 0.000***

R-squared 0.2104 0.1504

Number of observations 280 280

Wald chi2 51.33 30.86

Prob > chi2 0.0000 0.0001

Model 1 Model 2

Regression on number of coins left to recipient

Individual network position

Centrality: degree centrality But, the links other people have are important too:

The links other people have: Control of access and benefits (structural holes; Burt,

1992) Leadership position (responsibility) Searching costs (Coleman, 1990)

The links other people have in the ego-network: Reputation effects (Burt, 1992) Norm-based behavior (reputation effects, indirect

reciprocity): importance of mutual support networks Distinguish between mutual support relations and

general (whatever type) relations; the first are more specific and may be related with social norms

Wealth ranking of recipient

poor middle richest

wealth ranking of recipient by dictator

0

5

10

15

20

Nu

mb

er o

f co

ins

left

fo

r th

e re

cip

ien

t

971

952920 823811

669

N = 168

N = 71 N = 37

poor middle richest

wealth ranking of recipient by dictator

-10

0

10

20

Co

ins

left

to

rec

ipie

nt

- co

ins

left

to

str

ang

er

962

733

723

704

937715

854

974

885

791763

917

873 858

802

911927795

708

760751

817

N = 168 N = 71 N = 37

Economic resources (within subject analysis)

No Yes

The household of the recipient has cattle?

-10

0

10

20

Co

ins

left

to

rec

ipie

nt

- co

ins

left

to

str

ang

er

885

763 760

723751

873

858817

802

715

708

974

791

733

704

937

911

927

854 795

N = 140 N = 140

No Yes

The household of the recipient has land?

-10

0

10

20

Co

ins

left

to

rec

ipie

nt

- co

ins

left

to

str

ang

er

763 760

723751

873

858

715854

974

885

791

733

704

937

911

927

795

708

N = 185 N = 95

Male - Male

Male - Female

Female - Male

Female - Female

Mann-Whitney U

x x 2265.5 (.955)

x x 1550.0 (.000***)

x x 1644.0 (.001***)

x x 2276.0 (.109)

x x 2328.0 (.124)

x x 2333.0 (.075*)

Male - male Male - female Female - male Female - female

Sex of dictator and recipient

0

5

10

15

20

Nu

mb

er o

f co

ins

left

fo

r th

e re

cip

ien

t

897

847

710

699

849

808

875

777

741

879

954

724

867 972

740

931

919

851

815

920

708

N = 67 N = 68

N = 70 N = 80

Sex of dictator and recipient

Mutual support networks

Land and mutual support

0%

20%

40%

60%

80%

100%

120%

0 1 2 3-4 ≥ 5

Degree centrality

HH has land HH has not land

2. Centrality

Cattle and mutual support

0%

20%

40%

60%

80%

100%

120%

0 1 2 3-4 ≥ 5

Degree centrality

HH has cattle HH does not have cattle

Mutual support networks

2. Centrality

Sex and mutual support

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 1 2 3 4-5 > 5

Degree centrality

Female Male

Coef. Rob. S.E Sig. Coef. Rob. S.E Sig.

Neighbour (dummy) 2.096 0.300 0.000*** 1.241 0.249 0.000***

Family relation (first degree) 0.925 0.275 0.001*** -1.197 0.376 0.001***

Sex: ego female; alter male (dummy) -0.043 0.330 0.896 0.406 0.240 0.091*

Sex: ego male; alter female (dummy) -1.013 0.534 0.058* 0.126 0.330 0.702

Sex: ego male; alter male (dummy) 0.121 0.395 0.760 1.738 0.224 0.000***

Land: ego yes; alter yes (dummy) 0.421 0.584 0.472 -0.224 0.326 0.492

Land: ego yes; alter no (dummy) -0.041 0.515 0.936 -0.047 0.285 0.868

Land: ego no; alter yes (dummy) 0.474 0.212 0.026** -0.078 0.114 0.492

Cattle: ego yes; alter yes (dummy) 0.622 0.576 0.281 0.587 0.261 0.025**

Cattle: ego yes; alter no (dummy) 0.376 0.524 0.473 0.241 0.282 0.394

Cattle: ego no; alter yes (dummy) 0.885 0.255 0.001*** 0.115 0.118 0.329

Education of ego -0.012 0.046 0.789 0.032 0.035 0.366

Education of alter 0.001 0.029 0.984 0.050 0.010 0.000***

Age of ego -0.007 0.010 0.516 -0.006 0.008 0.431

Age of alter -0.006 0.010 0.528 0.013 0.003 0.000***

Constant -4.441 0.875 0.000*** -3.637 0.501 0.000***

Number of observations 8114 8114

Log pseudolikelihood -580.544 -2586.8

Pseudo R2 0.095 0.104

Wald chi2 136.15 287.39

Prob > chi2 0.0000 0.0000

Mutual support relations Friendship relations

Logit regression on directed relations

Research questions

Our interest comes from the current debate in development economics on decentralization : Decentralization: delegation to the local level of any

type of decision-making

In our case: the task to distribute aid resources → less costly but also less control on distributive outcomes

Two ways for the policymaker to maintain certain influence on distribution

One focus: monitoring mechanisms Other focus (= our focus): influencing local

determinants behind local distributive processes

Experimental design

First, mapping of social networks; confidence is built with local participants; support of local leaders

Then, experiment in one-day; contagion is limited

Payments to recipients are made the day after; recipients are likely to have played as dictator too (acceptance of payments!)