Market integration accounts for local variation in generalized altruism in a nationwide lost-letter experiment

Abstract

What explains variation in levels of prosocial behavior across communities? And are members of the ingroup and outgroup treated differently? According to evolutionary theories of generalized altruism, market integration should lead to greater levels of prosociality: Market exchange forces people to interact with unknown others, thus creating the conditions for the extension of prosocial behavior beyond close-knit circles to include outgroup members and strangers. Moving away from the evolutionary focus on cross-cultural variation, this article uses the market-integration hypothesis to explain intracultural variation in levels of prosociality in an advanced society. Taking advantage of an ideal setting, this study reports results from a large-scale, nationwide lost-letter experiment in which 5,980 letters were dispersed in a sample of 188 Italian communities. The study confirms the relevance of market integration in accounting for differences in levels of prosociality: In areas where market exchange is dominant, return rates are high. It also casts a light on the relationship between ingroup and outgroup prosociality: Return rates for both Italian and foreign recipients are the same; they vary together; and ingroup returns are highly predictive of outgroup returns at the community level.

Keywords: generalized and parochial altruism; lost-letter experiment; market integration; prosocial behavior; social capital.

Fig. 1.

Hypothetical trends for the generalized altruism and parochial altruism hypotheses.

Fig. 2.

Proportion of letters returned to an Italian recipient aggregated by region.

Fig. 3.

Letter-return rates increase as a function of market integration. Upper shows the relationships between return rates for Italian recipients and 5 measures of market integration: economic growth (region), number of municipalities in an industrial district (province), rate of employment (municipality), rate of female employment (municipality), and private-to-public employment ratio (municipality) (n = 188). Lower shows the relationship for Italian (blue dots and lines) and immigrant (red dots and lines) recipients (n = 63, because letters for both Italians and immigrants were dropped in only 63 municipalities). Plots are from linear regression models.

Fig. 4.

Rates of return for a nationwide lost-letter experiment conducted in Italy: 188 communities and 5,980 letters dispersed. Whiskers in plots report the standard errors of estimates from linear regression models.