The Relevance of Social Norms for Economic Efficiency: Theory and its Empirical Test

Anil Alpman ()
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Anil Alpman: Centre d'Economie de la Sorbonne - Paris School of Economics, https://centredeconomiesorbonne.univ-paris1.fr

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: This paper proposes a new formulation of the theory of social norms. The theoretical model explores the interrelation between individuals' income, time-use and consumption decisions on the one hand, and the determinants of their decision to conform or not to social norms on the other. It is shown that rational consumers will obey inefficient social norms, which in turn will slow economic development. An empirical test of the model is performed for different categories of countries using a voluminous cross-country micro dataset. The results yield the gain and the cost of disobeying inefficient social norms, the latter of which can be used as a freedom indicator regarding social pressure

Keywords: Consumer theory; social norms; social interactions; household production model; economic efficiency (search for similar items in EconPapers)
JEL-codes: D11 D12 Z13 (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-evo, nep-hme and nep-soc
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:13038

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