Abstract
In this study we conduct a lab-in-the-field experiment with low-income Hispanics in three neighborhoods in a large city in the U.S. to investigate how identity and social exclusion influences individual contributions to fund local public goods. We find that while the strength of identity has a significant and positive impact on individual contributions to local public goods, the perception of social exclusion significantly decreases contributions. Our findings thus suggest factors that may impede full civic participation, and shed important light on potential policies to increase integration of immigrants and ethnic minorities into mainstream society.
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Notes
As part of a large-scale field project, this paper differs from its four companion studies including Leonard et al. (2010), de Oliveira et al. (2011, 2012), Li et al. (2015). This paper is the only one in the project that focuses on social exclusion and the Hispanic sample, and one of two papers (besides Li et al. 2015) which investigate identity. It is different from Li et al. (2015) in three aspects: (a) the two datasets overlap very little; only 26 observations (13 % of the data) in this study are also reported in the non-identity-prime treatment in Li et al. (2015); (b) this paper uses survey measures of identity, rather than an identity prime; and (c) this paper focuses also on social exclusion. Table S1 in the Supplementary describes these four papers including their main research questions, methodologies, findings and the data used.
We follow Alesina et al. (1999) in computing the ethnic fractionalization index using the U.S. 2010 census data for each neighborhood. The index for neighborhood n equals \( 1 - \sum\nolimits_{{g = 1}}^{G} {s_{{gn}}^{2}} \) where \( s_{gn} \) is the population share of ethnic group g in neighborhood n. The index measures the probability that two individuals randomly chosen from the neighborhood belong to different ethnic groups. The index varies from zero (homogeneous) to one (extremely heterogeneous).
Some non-U.S.-born participants in our sample could be U.S. citizens through naturalization but we are unable to identify them. We purposefully avoided immigration-related questions that could potentially drive away undocumented immigrants.
In the risk task, participants choose which of the six 50/50 gambles ($80/80, $60/120, $40/160, $20/200, $0/240, and −$20/260) to play. The ten time-preference choices were $64 tomorrow versus $68 in one (or five) month; $60 tomorrow versus $61 (62, 64, 66, 68) in 1 month; $60 tomorrow versus $65 (70, 80, 90, 100) in 5 months.
The four discrete options were designed to simplify the task, and allowed the choices to be depicted visually using $20 bills. We eliminated the 50/50 option in order to avoid the 1/n split cognitive bias in which individuals divide assets evenly across the n options available, a naive type of diversification observed in individual investment decisions (Benartzi and Thaler 2001).
We re-scale the 4-point scale measure to a 5-point scale measure so they can be combined for our average identity measure.
As shown in Supplementary material, the exact wording of the statements that the participants were asked to rate was “I see myself as an American”, “I see myself as a Texan”, “I see myself as a member of my neighborhood”, “I have a strong sense of belonging to the (neighborhood name) area”, and “I have a lot of pride in the (neighborhood name) area”.
On average 83 percent of those who made an appointment showed up. No significant differences were found across the neighborhoods.
High stakes were used to attract participation of local residents in these neighborhoods. The experimental sessions were long (around 2 h), and recruitment of this particular population was difficult because of a distrust of authority. The relatively high stakes ensured that we had an enthusiastic participant pool.
Although Fig. 1 shows differences in giving between VCM and each local charity, we find no statistically significant differences in the amounts given, or the likelihood of giving, across these categories in the regression analysis presented in Sect. 4.2. How VCM giving compares to giving to local organizations is an interesting question, which is explored directly in de Oliveira et al. (2011). They use the same experiment design, but a sample of African-American residents in a low-income neighborhood, and find that individual choices in VCM predict giving to local organizations. However, choices vary systematically by the decision contexts and individual perceptions of their neighborhoods. In contrast, the main focus of this study is not on the comparison in giving between VCM and local organizations; it is the impact of social exclusion and identity on giving overall. We use the comparison between the VCM (where there is no social exclusion) and the local organizations as a way to identify the effects of these factors.
Correlations between the contributions and risk/time preference choices are presented in Supplementary Table S2.
Instead of using the average measures of identity and social exclusion, an alternative approach is to generate composite measures for identity and social exclusion, respectively, using the confirmatory factor analysis (see Harrington (2008) for details). A brief description on this approach and the corresponding regression results (which are consistent with those in the main analysis presented in Sect. 4.2) are reported in Supplementary Table S3.
The lack of correlation between identity and social exclusion may be surprising at first glance. As we have argued above, however, these constructs are not simply mirror opposites. While some U.S.-born participants may have a strong identity and a low degree of social exclusion, others may have experienced low degree of social exclusion, yet have low identity, especially if they live in an ethnically heterogeneous community (e.g., neighborhood 3) or a community dominated by another ethnic group (e.g., neighborhood 1 of a largely African–American community). On the other hand, in a traditional Hispanic enclave (e.g., neighborhood 2), it is possible that Hispanic immigrants have a strong identity but still feel socially excluded from mainstream American society. Our dataset independently captures these two dimensions in order to empirically examine their relationship and independently identify their effects.
One referee suggested an ordered Probit model rather than a Tobit. The results reported below are consistent with either analysis technique, and results from the ordered Probit are available upon request.
The Cragg hurdle model (“churdle” and “margins” in Stata 14) is used to estimate columns 2–3, 5–6 and 8–9. The overall likelihood function for the Cragg Hurdle model is constructed as the product of two likelihoods: the likelihood of contributing a positive amount (probit) and the conditional likelihood of contributing a certain amount out of the $60 endowment. See Woodridge (2002, pp. 536–538) and Botelho et al. (2009) for more details on the Hurdle model.
The risk variable is a categorical variable with the most risky choice being 6 and the least being 1 in the risk preference task.
As another robustness check, we conduct additional analysis on the possible interaction effects between fractionalization and identity (or social exclusion). We focus on contributions to local organizations only, and present the results in Supplementary Table S4. We find that the positive impact of identity on the likelihood of giving and the conditional amount is significantly lower in more ethnically fractionalized neighborhood (p < 0.05, columns 2–3 and 5–6). However, the interaction between fractionalization and social exclusion is not statistically significant, and excluding this interaction term does not impact the results of other variables.
This might be due to the fact that the majority of our participants had relatively low levels of education.
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Acknowledgments
We thank Angela de Oliveira and Catherine Eckel for their input in the design and implementation of this study. We also thank seminar/conference participants at the 2011 North-American Economic Science Association Conference (Tucson), UT Dallas, the 2013 Celebrating 25 Years of Warm Glow Conference at UCSD, and the CUNY Queens College Seminar Series. Field research assistance was provided by Wayra Rodriguez. Funding was provided by the National Science Foundation (SES-0752855). Any errors remain our own.
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Candelo, N., Croson, R.T.A. & Li, S.X. Identity and social exclusion: an experiment with Hispanic immigrants in the U.S.. Exp Econ 20, 460–480 (2017). https://doi.org/10.1007/s10683-016-9492-1
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DOI: https://doi.org/10.1007/s10683-016-9492-1