TY - UNPB

T1 - Leveling up? An inter-neighborhood experiment on parochialism and the efficiency of multi-level public goods provision

AU - Gallier, Carlo

AU - Goeschl, Timo

AU - Kesternich, Martin

AU - Lohse, Johannes

AU - Reif, Christiane

AU - Römer, Daniel

N1 - Publisher Copyright: © 2019 Elsevier B.V.

PY - 2017/2/22

Y1 - 2017/2/22

N2 - Many public goods can be provided at different spatial levels. Evidence from socialidentity theory and in-group favoritism raises the possibility that where higher-level provision is more efficient, subjects’ narrow concern for local outcomes (parochialism) could harm efficiency. Building on the experimental paradigm of multi-level public good games and the ‘neighborhood attachment’ concept, we conduct an artefactual field experiment with 600 participants in a setting conducive to parochial behavior. In an inter-neighborhood intraregion design, subjects allocate an endowment between a personal account, a local, and a regional public good account. The between-subjects design varies across two dimensions: One informs subjects that the smaller local group consists of members from their own neighborhood (‘neighbors’). The other varies the relative productivity at the two public goods provision levels. We find evidence for parochialism, but contrary to our hypothesis, parochialism does not interfere with efficiency: The average subject responds to a change in relative productivities at the local and regional level in the same way, whether aware of their neighbors’ presence in the small group or not. The results even hold for subjects with above-median neighborhood attachment and subjects primed on neighborhood attachment.

AB - Many public goods can be provided at different spatial levels. Evidence from socialidentity theory and in-group favoritism raises the possibility that where higher-level provision is more efficient, subjects’ narrow concern for local outcomes (parochialism) could harm efficiency. Building on the experimental paradigm of multi-level public good games and the ‘neighborhood attachment’ concept, we conduct an artefactual field experiment with 600 participants in a setting conducive to parochial behavior. In an inter-neighborhood intraregion design, subjects allocate an endowment between a personal account, a local, and a regional public good account. The between-subjects design varies across two dimensions: One informs subjects that the smaller local group consists of members from their own neighborhood (‘neighbors’). The other varies the relative productivity at the two public goods provision levels. We find evidence for parochialism, but contrary to our hypothesis, parochialism does not interfere with efficiency: The average subject responds to a change in relative productivities at the local and regional level in the same way, whether aware of their neighbors’ presence in the small group or not. The results even hold for subjects with above-median neighborhood attachment and subjects primed on neighborhood attachment.

KW - Artefactual field experiment

KW - Multi-level public goods

KW - Parochialism

KW - Social identity

KW - Economics

M3 - Working papers

T3 - ZEW - Discussion Papers

BT - Leveling up? An inter-neighborhood experiment on parochialism and the efficiency of multi-level public goods provision

PB - ZEW - Leibniz Centre for European Economic Research GmbH

CY - Mannheim

ER -