Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155316
Authors: 
Gallier, Carlo
Goeschl, Timo
Kesternich, Martin
Lohse, Johannes
Reif, Christiane
Römer, Daniel
Year of Publication: 
2017
Series/Report no.: 
ZEW Discussion Papers 17-012
Abstract: 
Many public goods can be provided at different spatial levels. Evidence from social identity 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 intra-region 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.
Subjects: 
social identity
parochialism
multi-level public goods
artefactual field experiment
JEL: 
C9
D7
H4
Document Type: 
Working Paper

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