Proposal No. 0649330 PI: Christopher B. Barrett CO-PI Annemie Maertens
This field dissertation research analyzes quantitatively the effects of identity and social network on educational investment, agricultural technology adoption and market participation decisions and differentiates these effects along pathways (social learning, discrimination, social norms, imitation, price-scale effects and effects on the agent's resource constraints) using data from six villages in the Indian states of Maharashtra and Andhra Pradesh. The villages selected for this study have been studied before by ICRISAT in its Village Level Studies (VLS) during the period 1975-1985, and as such detailed background information and data on both household and village level characteristics are available. This dissertation research thereby addresses an important gap in the development economics literature. Recent studies in economics acknowledge the importance of (non-productive) identity and social networks in economic decision-making. Social networks and identity mediate the mapping from resources into outcomes through their effects on preferences, constraints and expectations, thereby influencing economic decisions such as investment in children's education, technology adoption decisions and market participation decisions. However, none of the existing studies have differentiated these effects along the following pathways: learning from one's contacts (often referred to as social learning), discrimination (i.e., prices or access to certain goods is different for members of different identity-based groups), price-scale effects (i.e., the value/cost of a good depends on the number of users), social norms (i.e., a rule in a certain locality that is socially enforced through sanctions), imitation (i.e., copying the actions of certain people one observes), and easing of labor, capital and credit constraints (e.g., friends and family give a helping hand on the land during harvest, lend machinery or provide loans). Differentiating these effects along these different pathways is important from a policy perspective as the right strategy to stimulate educational investment, increased and quicker uptake of promising technologies, and market participation depends fundamentally on the structure of the decision process at the household level. Concretely, the goal of this research is threefold: first, to contribute to the methodological development of the field of development economics by introducing a set of relatively new data-collection techniques, such as 1) the within-sample random technique where individuals who are part of a random sample are randomly matched with other individuals within the same sample and asked about past and present links, their willingness to establish a (hypothetical) link with him/her and their perception of his/her ability and social and cultural attributes and 2) the collection of information on subjective expectations and 3) the capacity to mobilize information by conducting small experiments; second, to develop an identification strategy to separate out the different social network and identity effects in the data; and third, to make the data and the data collection methodology publicly available, thereby ensuring that the policy implications of this study extend beyond the Indian case.
