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Neighborhood Effects and Social Behavior : The Case of Irrigated and Rainfed Rice Farmers in
Neighborhood Effects and Social Behavior :
The Case of Irrigated and Rainfed Rice Farmers in Bohol
~Emergence of Social Norms and Community Mechanisms~
Takuji W. Tsusaka
Accepted by 2012 AAEA (Agricultural and
Applied Economics Association of USA)
K
e i K
aj sa
i
Valerien O. Pede
Keitaro Aoyagi
Thanks:
JICA
Lolit Garcia
Elmer Suñaz
Edmund Mendez
Evangeline Austria
Ma. Indira Jose
Neale Paguirigan

According to the reviewers of the conference,

“Experimental methods, spatial econometrics, and survey methods are nicely blended in a single study.”

“The study provides innovative approaches to investigate the spillover effect of social behaviors.”

“Excellent job!!”

study provides innovative approaches to investigate the spillover effect of social behaviors.” “Excellent job!!” 1

Social Behavior

Social Behavior Social Interaction • Solow 1999). Empirical and theoretical supports:
Social Behavior Social Interaction • Solow 1999). Empirical and theoretical supports:
Social Behavior Social Interaction • Solow 1999). Empirical and theoretical supports:

Social Behavior

Social Interaction

Solow 1999).

Empirical and theoretical supports:

Social Relationship
Social Relationship
Mutual Trust
Mutual Trust

Often used as synonyms and are considered to be forms of social capital, although they may carry different connotations (Ionnides & Topa, 2010)

Plays a crucial role in rural development and poverty reduction.

Mechanism to induce effective collective actions and reduce

transaction costs in a variety of ways (Hayami 2009, Arrow 1999,

Grootaert & van-Bastelaer (2008), Krishna (2007), Chou (2006), Isham et al. (2002), Zack & Knack (2001), Knack & Keefer (1997), etc. etc.

Neighborhood Effect and Social Behavior (Objective)

Our View: Since social behavior takes place between people, it is natural to suppose that such behavior may affect other people’s behavior; i.e., there must be spillovers and externalities of social behavior.

must be spillovers and externalities of social behavior. Social Behavior/Social Capital Neighborhood Effects Blume,
Social Behavior/Social Capital Neighborhood Effects Blume, Bandiera, Brock, Durlauf, Moffitt, Raudenbush, Sampson,
Social Behavior/Social Capital
Neighborhood Effects
Blume, Bandiera, Brock, Durlauf, Moffitt,
Raudenbush, Sampson, Cook, Manski etc.
Hayami, Grootaert, van-Bastelaer,
Krishna, Chou, Isham, Zack,
Knack, Arrow, Solow, Keefer, etc.
Ionnides,
Topa
using behavioral game experiments…
using spatial econometrics…
Bandiera, Rasul, Conley, Udry, Anselin,
Griffith, etc.
Onesa, Putterman, Dufwenberg, Muren,
Cook, Cooper, Eckel, Wilson, Bohnet,
Zeckhauser, Ben-Ner, etc.

For example,

For example, Y i = Social Behavior (e.g. Trusting) X i = Individual Profile (e.g. Age)

Yi = Social Behavior (e.g. Trusting)

Xi = Individual Profile (e.g. Age)

εi = Residual

X i = Individual Profile (e.g. Age) ε i = Residual Endogenous Social Effect or Spatial

Endogenous Social Effect or Spatial Lag Effect

Exogenous Social Effect or Cross Effect or Contextual Effect

Correlated Social Effect or Perturbation Effect

Neighborhood Effect

Yj Yj Xj Xj Yi εj εj Xi Yj Yj Xj εi Xj εj εj
Yj
Yj
Xj
Xj
Yi
εj
εj
Xi
Yj
Yj
Xj
εi
Xj
εj
εj

Spatial Econometric Approach (1) Neighborhood Definition

Weight Matrix

n observations

n

Spatial Lag Operator

X

 

x

1

x

2

x

3

=

·

·

·

x

n

0 1 0 1 0 0 0 · · · n
0
1
0
1
0
0
0
·
·
·
n
after normalization
after normalization

WX =

x averaged over neighbors for obs 1 x averaged over neighbors for obs 2 x
x
averaged over neighbors for obs 1
x
averaged over neighbors for obs 2
x
averaged over neighbors for obs 3
·
·
·
x
averaged over neighbors for obs n

W

Spatial Econometric Approach (2) Model Specification

1)

a-Spatial Model

Y

= α 1 X + ε 1

2)

Cross Regression Model

Y = α 2 X + β 2 WX + ε 2

3

)

S

ti

pa

a

l R

i

egress on

M

o

d

l

e

Spatial Diagnostics Lagrange Multiplier Tests

Moran’s I

Lag Test

Error Test

Robust Lag Test

Robust Error Test

SARMA Test

Lag Test • Robust Error Test • SARMA Test (Maximum Likelihood Estimation) a) Lag Model (w/Cross)
Lag Test • Robust Error Test • SARMA Test (Maximum Likelihood Estimation) a) Lag Model (w/Cross)

(Maximum Likelihood Estimation)

a) Lag Model (w/Cross) (Spatial Durbin Model)

Y = ρ 3 WY + α 3 X + β 3 WX + ε 3

b) Error Model (w/Cross)

Y = α 4 X + β 4 WX + ε 4 ,

ε 4 =

c) ARAR Model (w/Cross)

4 WX + ε 4 , ε 4 = c) ARAR Model (w/Cross) λ 4 Wε

λ 4 4 + µ 4

Y = ρ 5 WY + α 5 X + β 5 WX + ε 5 ,

ε 5 = λ 5 5 + µ 5

Behavioral Game Experiment

Purpose: To elicit individuals’ social behavior quantitatively.
Purpose:
To elicit individuals’ social behavior quantitatively.

General Instructions

• All participants receive a pre-paid show-up fee of P50 at the beginning.

• The games deal with actual money. Whatever money participants win in games will be theirs to take home.

• The amount they win depends on the decisions they make during the games.

• The games must be taken seriously. They are not allowed to talk to other participants during the entire event. If they fail to follow the rule, they will not be given the post-paid show-up fee, P100 at the end of all experiments.

Dictator Game

• The game is played by pairs. Your anonymous partner is in a separate room. You never know who it is.

• At the beginning, you (sender) get P100/Your partner (receiver) gets nothing.

Your partner will receive a transfer from you/You will not receive any money from your partner.

• The amount you keep is your payoff of this game/The amount your partner receives is his/her payoff of this game.

• How much do you transfer to your partner, if your partner is someone in your barangay?

Dictator Game Example
Dictator Game Example

Your Room (Senders)

Keep: P50

A (You)

The other Room (Receivers)

Send: P50

Keep: P50 A (You) The other Room (Receivers) Send: P50 ? Receive: P50 Keep: P100 Keep:

?

Receive: P50

Keep: P100

Keep: P0

 

Send: P0

B

 

Send: P100

C

? Receive: P0

?

Receive: P100

The amount you keep is your payoff of this game
The amount you keep
is your payoff of this
game
The transferred amount is recorded as the game result, and is interpreted as a measure
The transferred amount is recorded as
the game result, and is interpreted as a
measure of your altruistic behavior.

The amount they receive is their payoff of this game

9

9

10

10

Behavioral Game Experiment

Public Goods Game (Two Rounds)

1 st Round

• The game is played by groups of four people of which you are one. The three anonymous partners are in a separate room. You never know who they are.

• At the beginning, you (sender) and your partners (receivers) get P100 each.

You and your partners confidentially contribute some amounts to the group. The total amount contributed will be doubled, and the doubled amount will be shared equally among all members, regardless of your contribution.

• The amount you keep plus the amount you receive back from the group is your payoff of this game.

• How much do you contribute to the group, if your partners are some ones in your barangay?

Keep P 50 You Contribute P 50 Keep P 50 A Contribute P 50 Keep

Keep P 50

You

Contribute P 50
Contribute P 50
Keep P 50 You Contribute P 50 Keep P 50 A Contribute P 50 Keep P
Keep P 50 You Contribute P 50 Keep P 50 A Contribute P 50 Keep P

Keep P 50

A
A

Contribute P 50

Keep P 50 You Contribute P 50 Keep P 50 A Contribute P 50 Keep P
Keep P 50 You Contribute P 50 Keep P 50 A Contribute P 50 Keep P
Keep P 50 You Contribute P 50 Keep P 50 A Contribute P 50 Keep P
Keep P 50 You Contribute P 50 Keep P 50 A Contribute P 50 Keep P

Keep P 50

Keep P 50

C
C

Contribute P 50

B B

Contribute P 50

P 50 Keep P 50 Keep P 50 C Contribute P 50 B Contribute P 50
P 50 Keep P 50 Keep P 50 C Contribute P 50 B Contribute P 50
(50+50+50+50) P 200
(50+50+50+50)
P 200
50 C Contribute P 50 B Contribute P 50 (50+50+50+50) P 200 The contributed amount is
The contributed amount is recorded as the game result, and is interpreted as a measure
The contributed amount is
recorded as the game result,
and is interpreted as a
measure of your contributory
behavior to public goods.
Public Goods Game Round 1, Example ×2 P 400
Public Goods Game
Round 1, Example
×2
P 400

Receive P 100

+

P 150

Payoff

P 50

Receive P 100

+

P 150

Payoff

P 50

Receive P 100

+

P 150

Payoff

P 50

Receive P 100

+

P 150

Payoff

P 50

12

Behavioral Game Experiment

Public Goods Game (Cont’d)

• Therefore, the game has an aspect of investment.

• What if you increase/decrease your contribution, others’ contributions kept unchanged?

Case1

You

Partner A

Partner B

Partner C

Contribution

50

50

50

50

Payoff

150

150

150

150

Case2

You

Partner A

Partner B

Partner C

Contribution

20

50

50

50

Payoff

165

135

135

135

Case3

You

Partner A

Partner B

Partner C

Contribution

80

50

50

50

Payoff

135

165

165

165

Case4

You

Partner A

Partner B

Partner C

Contribution

80

80

80

80

Payoff

180

180

180

180

80 80 80 80 Payoff 180 180 180 180 Incentive for cheating (free-riding) Importance of

Incentive for cheating (free-riding)

80 80 Payoff 180 180 180 180 Incentive for cheating (free-riding) Importance of Collective Action 13
80 80 Payoff 180 180 180 180 Incentive for cheating (free-riding) Importance of Collective Action 13

Importance of Collective Action

Behavioral Game Experiment

Public Goods Game (Cont’d) After the 1 st Round

• You can secretly check the contribution from each partner by paying P1.

• Then, you can send a message to particular partners to indicate that you are unhappy with that person’s contribution, by paying P1 per message.

with that person’s contribution, by paying P1 per message. We will consider two variables in the
We will consider two variables in the analysis • Messa e Recei t Dumm g
We will consider two variables in the analysis
• Messa e Recei t Dumm
g
p
y
Indicator for
p
eer
p
ressure on
y
ou
Group Members’
Average Contribution
Your
Check
• Free-riding Index (FRI) ≡
×
Contribution
Dummy
Indicator for degree of awareness of own free-riding

Then, Play the 2 nd Round

with the same partners as in the 1 st round.

Round with the same partners as in the 1 s t round. The contributed amount is
The contributed amount is recorded as the result of the second round, and is interpreted
The contributed amount is recorded as the result of the second round,
and is interpreted as a measure of your contributory behavior to public
goods in the presence of monitoring mechanism.

14

Our Study Site

San Miguel/Trinidad/Ubay, Bohol Thanks to Arnel & Nel ! Figure by Barkada Tours
San Miguel/Trinidad/Ubay, Bohol
Thanks to
Arnel & Nel !
Figure by Barkada Tours

Our Data

Primary Data

Agricultural and Socioeconomic Data ( X)

4 crop seasons from 2009 to 2010 One half of the irrigated farmers (randomly selected): Volumetric pricing system The other half: Area size based flat rate Volumetric Pricing Dummy

half: Area size based flat rate Volumetric Pricing Dummy Geographical Coordinates ( W ) Both farm

Geographical Coordinates ( W)

Both farm plots and residences.

Coordinates ( W ) Both farm plots and residences. Two types of neighborhood can be defined

Two types of neighborhood can be defined

Behavioral Game Results ( Y)

243 randomly selected farmers Irrigated (N = 132) & Rain-fed (N = 111)

( Y ) 243 randomly selected farmers • Irrigated ( N = 132) & Rain-fed (

The sample for this study

Data: Descriptive Statistics

Agricultural & Socioeconomic Variables (X)

 

Sample Mean (Standard Deviation)

 

Overall

(N=243)

Irrigated

Areas

Rainfed

Areas

t-test for mean difference [p-value]

(N=132)

(N=111)

Volumetric Pricing Dummy

 

0.561

 
 

(0.498)

Age

51.062

49.689

52.694

3.004

*

(12.019)

(12.248)

(11.585)

[0.052]

Gender Dummy

 

0.708

0.758

0.649

0.109

*

 

(0.456)

(0.430)

(0.480)

[0.063]

Years of Schooling

 

6.395

6.144

6.694

0.550

 

(3.0384)

(2.922)

(3.159)

[0.160]

Ln Asset

 

10.578

10.444

10.738

0.295

 

(1.132)

(1.193)

(1.038)

[0.718]

Field Size (ha)

 

1.585

1.167

1.754

0.586

***

 

(1.058)

(0.682)

(1.228)

[0.000]

Household Size (head count)

5.936

6.144

5.689

0.455

(2.302)

(2.321)

(2.265)

[0.125]

Household Female Ratio

 

0.500

0.484

0.519

0.035

*

 

(0.162)

(0.148)

(0.176)

[0.092]

Value for the last season Averaged over the 4 seasons

Statistical Significance: *** 1 %, * 10%

17

Data: Descriptive Statistics

Behavioral Game Results (Y) & Control Variables

Sample Mean (Standard Deviation)
Sample Mean
(Standard Deviation)

Overall

(N=243)

Irrigated

Areas

Rainfed

Areas

t-test for mean difference [p-value]

(N=132)

(N=111)

Dependent Variables (Y) Dictator Game

30.041

32.197

27.477

4.719

*

(20.236)

(21.555)

(18.314)

[0.070]

PGG Round 1

54.403

53.182

55.856

2.674

(23.033)

(22.080)

(24.139)

[0.368]

PGG Round 2

52.140

51.818

52.523

0.704

(24.350)

(23.633)

(25.279)

[0.823]

Controls for PGG Risk Preference

53.786

54.470

52.973

1.497

(25.898)

(24.380)

(27.686)

[0.655]

PGG R1 Message Receipt Dummy

0.280

0.273

0.288

0.016

(0.450)

(0.447)

(0.455)

[0.789]

PGG R1 Free-riding Index

-0.110

0.455

-0.781

1.235

(15.335)

(14.746)

(16.049)

[0.533]

Statistical Significance: * 10%

18

Defining the Neighbors

Weight Matrices (W)
Weight Matrices (W)

2 Areas

2 types of neighborhood

Irrigated ×××× Rainfed How did we choose neighbors??
Irrigated
××××
Rainfed
How did we choose neighbors??

Residential Neighborhood Plot Neighborhood

= 4 Weight Matrices

d You
d
You

Threshold Distance

d You
d
You

Too short Some people will have no neighbor Those observations will be dropped.

Too long Boundary Bias Problem (e.g. Griffith, 1983)

Impose the shortest possible threshold distance. (GeoDa does it)
Impose the shortest possible threshold distance.
(GeoDa does it)

19

Defining the Neighbors

Individually Calculated 4 Threshold Distances

km

(a)

Plot Neighborhood/Irrigated Farmers

0.959

(b)

Plot Neighborhood/Rainfed Farmers

1.302

(c)

Residential Neighborhood/Irrigated Farmers

0.956
0.956

Use this as a uniform

(d)

Residential Neighborhood/Rainfed Farmers.

1.376

threshold distance

Neighborhood Structures; Statistics

Field Plot Neighbors

t-test for

Residential Neighbors

t-test for

   
 

mean

mean

@Threshold Distance = 0.956km

Irrigated

Rainfed

difference

Irrigated

Rainfed

difference

Areas

Areas

[p-value]

Areas

Areas

[p-value]

 

Weight Code

(a)

(b)

(c)

(d)

Number of Observations Total Number of Neighbor Relations Nonzero Weights (%) Avg. Num. of Neighbors

131

109

132

110

860

1166

866

1292

5.01

9.81

4.97

10.68

6.565

10.697

4.132

6.561

11.746

5.185

 

(2.649)

(4.309)

[0.000]

(3.119)

(5.409)

[0.000]

 

Avg. Distance bet. Neighbors (km)

0.603

0.587

0.016

0.583

0.574

0.009

 

(0.236)

(0.239)

[0.293]

(0.243)

(0.252)

[0.564]

Defining the Neighbors

Distribution of the Number of Neighbors
Distribution of the Number of Neighbors
(a) Plot/Irrigated 20 20 15 15 10 10 5 5 0 0 1 2 3
(a)
Plot/Irrigated
20
20
15
15
10
10
5
5
0
0
1
2 3 4 5 6 7 8 9 10111213141516171819202122
(c)
Plot/Rainfed
20
20
15
15
10
10
5
5
0
0

1 2 3 4 5 6 7 8 9 10111213141516171819202122

(b) Residential/Irrigated

6 7 8 9 10111213141516171819202122 (b) Residential/Irrigated 1 2 3 4 5 6 7 8 9

1

2 3 4 5 6 7 8 9 10111213141516171819202122

(d) Residential/Rainfed

1 2 3 4 5 6 7 8 9 10111213141516171819202122 (d) Residential/Rainfed 1 2 3 4

1

2 3 4 5 6 7 8 9 10111213141516171819202122

Defining the Neighbors

(b) Plot/Rainfed

(a) Plot/Irrigated

Graphical Representations

/ R a i n f e d (a) Plot/Irrigated Graphical Representations (d) Residential/Rainfed (c) Residential/Irrigated
/ R a i n f e d (a) Plot/Irrigated Graphical Representations (d) Residential/Rainfed (c) Residential/Irrigated

(d) Residential/Rainfed

(c) Residential/Irrigated

/ R a i n f e d (a) Plot/Irrigated Graphical Representations (d) Residential/Rainfed (c) Residential/Irrigated
/ R a i n f e d (a) Plot/Irrigated Graphical Representations (d) Residential/Rainfed (c) Residential/Irrigated

22

Summarized Hypotheses

H1) Social behaviors of individual farmers are influenced by their neighbors’ social behaviors and personal attributes.

H2) Neighborhood effects on social behaviors, particularly contribution to public goods, are higher in the irrigated areas vis-à-vis in the rain-fed areas.

H3) In the irrigated areas, farmers are more contributory to public goods when they are engaged in volumetric water pricing system than in area-based flat rate system.

H4) The endogenous social effects on public goods contribution are larger among farm plot neighbors than among residential neighbors.

Results: Spatial Model Diagnostics

Lagrange Multiplier Tests on Cross Regression Residuals for Spatial Dependence Identification
Lagrange Multiplier Tests on Cross Regression Residuals for Spatial Dependence Identification
Game Experiment Dictator Game Public Goods Game, Round 1 Public Goods Game, Round 2 Neighborhood
Game Experiment
Dictator Game
Public Goods Game, Round 1
Public Goods Game, Round 2
Neighborhood
Plot
Residential
Plot
Residential
Plot
Residential
Ecosystem
Irrigated
Rainfed
Irrigated
Rainfed
Irrigated
Rainfed
Irrigated
Rainfed
Irrigated
Rainfed
Irrigated
Rainfed
Moran's I
0.042
*
-0.031
0.131
***
-0.126
-0.087
0.060
***
0.004
-0.010
0.119
***
-0.016
0.162
***
0.014
*
(0.050)
(0.385)
(0.001)
(0.990)
(0.849)
(0.004)
(0.246)
(0.219)
(0.000)
(0.241)
(0.000)
(0.081)
Error Correlation
0.616
5.332
**
1.511
5.001
**
8.135
***
0.083
(0.433)
(0.021)
(0.219)
(0.025)
(0.004)
(0.773)
Lag Correlation
3 034
.
*
7 854
.
***
1 831
.
10 961
.
***
9 849
.
***
0 974
.
(0.082)
(0.005)
(0.176)
(0.001)
(0.002)
(0.324)
Error Correlation
12.977
***
2.540
0.623
0.375
0.214
1.165
Robust
(0.000)
(0.111)
(0.430)
(0.540)
(0.644)
(0.281)
Lag Correlation
15.395
***
5.062
**
0.943
6.335
**
1.928
2.0555
Robust
(0.000)
(0.024)
(0.332)
(0.012)
(0.165)
(0.152)
SARMA
16.011
***
10.394
***
2.453
11.336
***
10.062
***
2.138
(0.000)
(0.006)
(0.293)
(0.003)
(0.007)
(0.343)
Lag
Lag
Lag
Spatial Model of
Our Choice
&
Cross
&
Cross
Cross
Cross
Cross
Cross
& Cross
Cross
Cross
Cross
Cross
Cross
ARAR
Lag
For Robustness
&
&
Check
Cross
Cross
(Statistical Significance: *** 1 %, ** 5%, * 10%, † 15% )

Results: Spatial Estimation

Dictator Game
Dictator Game

WY

Wε

WX

X

Statistical Significance:

Neighborhood

Plot

Significance: N e i g h b o r h o o d Plot Residential Ecosystem

Residential

N e i g h b o r h o o d Plot Residential Ecosystem Irrigated

Ecosystem

Irrigated

Rainfed

Irrigated

 

Rainfed

Spatial Model

Lag &

Lag &

ARAR &

Cross

Cross

Cross

Cross

Cross

Endogenous Social Effect (ρ)

0.239

*

0.352

***

0.331

Correlated Social Effect (λ) Neighbors' Characteristics (β) Volumetric Pricing Dummy Age Gender Dummy

 

0.034

-13.630

*

-11.492

-11.601

0.123

0.060

-0.105

-0.128

0.445

4 382

-24 624

*

11 062

11 584

8 701

Years of Schooling Ln Asset Field Area (ha) Household Size Household Female Ratio Own Characteristics (α) Volumetric Pricing Dummy Age Gender Dummy

.

-0.750

.

-4.222

*

.

-1.288

.

-1.322

.

1.294

-0.887

10.944

*

5.075

5.230

-1.344

16.206

***

3.016

8.419

8.361

4.183

-2.513

-2.327

-1.876

-1.895

-2.070

-2.364

-2.837

21.705

23.196

-5.491

-2.131

-0.327

-0.371

-0.201

-0.091

-0.263

*

-0.266

*

-0.121

2.914

3.098

3.526

3.605

5.631

Years of Schooling Ln Asset Field Area (ha) Household Size Household Female Ratio

0.610

0.282

0.221

0.213

0.334

-0.374

0.854

-0.308

-0.290

-0.347

-0.118

2.322

-0.956

-0.920

2.324

-0.323

0.261

-0.377

-0.387

0.462

29.147

**

3.188

30.608

**

30.845

**

-4.975

Public Goods Game, Round 1
Public Goods
Game, Round 1

WY

Wε

WX

X

Statistical Significance:

Results: Spatial Estimation

Neighborhood

Field Plot

Estimation N e i g h b o r h o o d Field Plot Residential

Residential

N e i g h b o r h o o d Field Plot Residential Ecosystem

Ecosystem

Irrigated

Rainfed

Irrigated

Rainfed

Spatial Model

Cross

Cross

Cross

Cross

Endogenous Social Effect (ρ)

Correlated Social Effect (λ)

Neighbors' Characteristics (β) Volumetric Pricing Dummy Age Gender Dummy Years of Schooling

 

-9.637

-11.411

-0.623

0.548

-0.682

*

-0.520

-9.676

19.125

-10.821

35.160

**

-0.152

-0.088

0.533

-1.508

Ln Asset Field Area (ha) Household Size Household Female Ratio Own Characteristics (α) Volumetric Pricing Dummy Age Gender Dummy

0.013

-3.671

3.425

-3.891

8.575

-7.042

2.966

5.672

-1.822

-0.502

1.453

0.633

11.186

11.712

-8.118

31.177

0.221

0.217

-0.450

***

-0.713

***

-0.441

***

-0.743

***

-4.709

-3.032

-5.778

-2.514

Years of Schooling Ln Asset Field Area (ha) Household Size Household Female Ratio Control Risk-Taking Behavior

0.112

-0.194

0.236

-0.044

2.323

2.589

1.307

0.981

5.586

*

-2.125

5.754

*

-1.965

-0.742

-0.717

-0.575

-0.889

20.000

-18.463

18.812

-14.913

0.227

***

0.132

0.215

***

0.135

Results: Spatial Estimation

Public Goods Game, Round 2
Public Goods
Game, Round 2

Neighborhood

Ecosystem

 

Field Plot

 

Residential

 
   

Irrigated

Rainfed

Irrigated

 

Rainfed

   
 

Lag &

Lag &

 

Spatial Model

Cross

Cross

Cross

Cross

Cross

 

WY

Endogenous Social Effect (ρ)

0.332

***

0.284

***

Wε Wε

Neighbors' Characteristics (β)

 
 

Volumetric Pricing Dummy Age Gender Dummy Years of Schooling

1.337

-11.436

*

-6.470

-0.317

-0.584

-0.276

-0.221

-0.579

0.439

14.381

-3.750

-1.077

25.875

-2.103

*

3.266

1.360

0.428

1.365

 

WX

WX

Ln Asset

2.964

-0.095

-1.520

-1.265

-3.677

 

Field Area (ha) Household Size Household Female Ratio Own Characteristics (α)

Volumetric Pricing Dummy Age Gender Dummy Years of Schooling

X

Ln Asset Field Area (ha) Household Size Household Female Ratio Controls Risk-Taking Behavior Round 1 Message Receipt Dummy Round 1 Free Riding Index Round 1 MRD x FRI

0 574

2 848

8 166

3 265

4 391

.

.

.

.

.

-0.577

3.104

0.798

0.224

4.020

-8.270

19.684

-35.690

-28.779

-19.813

3.199

3.314

4.083

0.167

-0.169

0.179

0.187

-0.089

2.492

0.145

0.690

2.059

-0.156

 

X

0.371

1.746

0.214

0.954

0.385

1.110

0.366

1.330

0.322

0.387

 

-0.716

-2.529

1.028

0.302

-2.671

0.613

0.219

0.567

0.517

0.144

7.872

-5.448

2.114

5.034

-6.961

0.126

**

0.252

***

0.193

***

0.161

***

0.240

***

Statistical

Significance:

7.312

0.212

**

*

11.574

0.014

**

7.139

0.232

*

*

7.416

0.266

**

**

11.731

0.093

**

*** 1 %, ** 5%, * 10%, † 15%.

 

0.440

**

-0.358

0.471

*

0.419

**

-0.289

Round 1 Own Contribution

0.847

***

0.542

***

0.821

***

0.840

***

0.584

***

Summary of the Results

Hypothesis Verification

H1 H2
H1
H2
H3H3
H3H3
H4H4
H4H4

H1) Social behaviors of individual farmers are influenced by their neighbors’ social behaviors and personal attributes.

The endogenous social effects among irrigated farmers are found in dictator game and monitored public goods game.

The exogenous social effects are minor on the whole. No correlated social effects are found.

H1 is accepted to the extent that it depends on the irrigation availability and the type of social behavior.

H2) Neighborhood effects on social behaviors, particularly contribution to public goods, augment in the irrigated areas vis-à-vis in the rain-fed areas.

There exists a clear contrast in the result between the two ecosystems.

The endogenous social effects and the impact of FRI are found only in the irrigated areas.

H2 is definitely supported.

H3) In the irrigated areas, farmers are more contributory to public goods when they are engaged in volumetric water pricing system than in area-based flat rate system

Volumetric water pricing makes no difference in the outcome of dictator game and pre-monitoring public goods game

It has a minimal positive effect in monitored public goods game.

H3 is only weakly supported.

H4) The endogenous social effects on public goods contribution are more salient among farm plot neighbors than among residential neighbors.

The spillover of public goods contribution under monitoring is stronger among plot neighbors than among residential neighbors.

H4 is clearly accepted.

28

Concluding Remarks

I. Emergence of social norms and community mechanisms in irrigated society.

i. Farmers’ altruistic behavior and contributory behavior spill over to their neighbors, indicating that collective actions required in irrigation water management induce the emergence of social norm: farmers decide on their social behavior more or less by following the way their neighbors behave socially.

ii. Cooperative resource management also promotes a community mechanism: free riding acts are corrected.

iii. This irrigation system was introduced in 2008. It is implied that, by intervention schemes such as the construction of gravity irrigation, changes in social norm and community mechanism occur rather shortly than slowly.

Essential Assumption: There was no intrinsic difference in behavioral spillover among irrigated farmers and among rainfed farmers prior to the construction of irrigation, which is partially supported by the descriptive tables.

Concluding Remarks

II. Limitations & Possible Extensions:

i. The contrasting result between the two ecosystems may be partially attributed to the relative concentration of neighbors in the rainfed areas, (in addition to the relatively independent agricultural practices). The result would be more convincing if we could separate out the former factor.

ii. “Number of neighbors (k-nearst neighbors)” and “Distance to neighbors (threshold distance)” are 2 conflicting criteria commonly used in constructing weight matrices. We have assumed the fairness of imposing the same threshold distance across the 4 types of neighborhood. It may be interesting to use a k-nearest neighbor criterion, though the choice of “k” has to be justified some way.

iii. The next step of this research may be to estimate social behaviors using social distance instead of geographical distance. Such a study will explore how personal relationship affects the spillover of social behavior (and will also be applicable to situations in which geographical distance is not a hard constraint).

Appendix

Marginal Effect vs. Coefficient Consider the endogenous social effects. Let λ be the marginal effect.

Marginal Effect vs. Coefficient

Consider the endogenous social effects.

Let λ be the marginal effect.

λ +

1

k 1

λ 3 +

1

k 2

λ 5 +

1

k

3

λ 7 + ……… =

j=1

λ

2k-1

j-1

k

Order of Approximation

λ

ρ

bias (%)

7th

0.5000

0.5217

4.35

5th

0.5217

4.34

3rd

0.5208

4.17

7th

0.4000

0.4110

2.74

5th

0.4110

2.74

3rd

0.4107

2.67

7th

0.3000

0.3046

1.52

5th

0.3046

1.52

3rd

0.3045

1.50

7th

0.2000

0.2013

0.67

5th

0.2013

0.67

3rd

0.2013

0.67

7th

0.1000

0.1002

0.17

5th

0.1002

0.17

3rd

0.1002

0.17

0.17 5th 0.1002 0.17 3rd 0.1002 0.17 = ρ marginal effect ( λ ) coefficient (

=

ρ

marginal effect (λ) coefficient (ρ) bias (%)

0.5000

0.5217

4.35

0.4000

0.4110

2.74

0.3000

0.3046

1.52

0.2000

0.2013

0.67

0.1000

0.1002

0.17

Marginal Effect vs. Coefficient Consider the exogenous social effects. Let λ be the marginal effect.

Marginal Effect vs. Coefficient

Consider the exogenous social effects.

Let λ be the marginal effect.

λ =

β (1+ ρ + ρ 2 + ρ 3 + ρ 4 +

When ρ = 0.3 , then λ ≈ 1.4β

) = β ∑ ρ j =

j=0

β

1-ρ

(if

0 < ρ < 1)