TY - JOUR

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 - Funding Information: Financial support by the German Federal Ministry of Education and Research (FKZ 01UN1204A/C) is gratefully acknowledged. Further details can be obtained from http://kooperationen.zew.de/en/soko/homepage.html. Funding Information: Financial support by the German Federal Ministry of Education and Research ( FKZ 01UN1204A/C ) is gratefully acknowledged. Further details can be obtained from http://kooperationen.zew.de/en/soko/homepage.html . Publisher Copyright: © 2019 Elsevier B.V.

PY - 2019/8

Y1 - 2019/8

N2 - Many public goods can be provided at different spatial levels. Evidence from social identity theory and in-group favoritism raises the possibility that when higher-level provision is more efficient, subjects’ narrow concern for local outcomes could undermine efficiency. Building on the experimental paradigm of multi-level public good games and the concept of “neighborhood attachment,” we conduct an artefactual field experiment with over 600 participants in a setting conducive to routine parochial behavior. In an inter-neighborhood intra-region design, subjects allocate an endowment between a personal, a local, and a regional public good account. The between-subjects design crosses two treatment dimensions: One informs subjects that the smaller local group consists of members from their own neighborhood, while 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 levels in the same way, whether they are 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 social identity theory and in-group favoritism raises the possibility that when higher-level provision is more efficient, subjects’ narrow concern for local outcomes could undermine efficiency. Building on the experimental paradigm of multi-level public good games and the concept of “neighborhood attachment,” we conduct an artefactual field experiment with over 600 participants in a setting conducive to routine parochial behavior. In an inter-neighborhood intra-region design, subjects allocate an endowment between a personal, a local, and a regional public good account. The between-subjects design crosses two treatment dimensions: One informs subjects that the smaller local group consists of members from their own neighborhood, while 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 levels in the same way, whether they are 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

UR - http://www.scopus.com/inward/record.url?scp=85068528854&partnerID=8YFLogxK

U2 - 10.1016/j.jebo.2019.05.028

DO - 10.1016/j.jebo.2019.05.028

M3 - Journal articles

AN - SCOPUS:85068528854

VL - 164

SP - 500

EP - 517

JO - Journal of Economic Behavior and Organization

JF - Journal of Economic Behavior and Organization

SN - 0167-2681

ER -