Social Capital in the Presence of Market Failures

Patricia Lopez-Rodriguez and Rodolfo De la Torre Garcia

MPRA Paper from University Library of Munich, Germany

Abstract: In Mexico, social capital is used to get resources. People who do not have access to formal markets use their networks to acquire public and financing services, social insurance and social benefits. To test this, social capital indicators were built using the resources supplied by people as a proportion of their income. This measure is theoretically related to a sympathy coefficient that represents the degree to which a person joins another´s welfare in its utility function, leading him to share resources with others. Synthetic panels with population cohorts were elaborated to follow population throughout the time. To correct a spurious regression problem, the cointegration-panel method was used. As a result, variables that reflect failures in financial, health and social insurance markets are associated to bonding and bridging social capital indicators. Thus, adjustments in these markets could be explained by social capital variables additionally to market prices mechanisms.

Keywords: social capital; market failures; equilibrium; relationships; networks. (search for similar items in EconPapers)
JEL-codes: D52 D81 D85 H55 I38 L14 Z13 (search for similar items in EconPapers)
Date: 2010, Revised 2010
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Citations: View citations in EconPapers (1)

Published in International Journal of Social Inquiry especial issue of social capital.Volume(2010): pp. 163-188

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:22972

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