Agricultural Economics Department
Date of this Version
2016
Citation
Universal Journal of Agricultural Research 4(1): 25-31, 2016
DOI: 10.13189/ujar.2016.040105
Abstract
The paper examines individual motivation about social capital, measured by willingness to accept of compensation to leave individually valued social relations behind in moving from an ideal-type mid-western rural community, referred to “Nirvana.” The Heckman two steps method is applied to analyze a survey conducted in Nirvana. In Step1, 665 observations are used to run a Probit estimate on the individual decision to move. In Step2, 438 observations are used to perform a Semi-log OLS estimate of social capital value. The empirical analysis suggests that social capital investment is driven by the dual motivation represented in an egoistic based self-interest and an empathy-sympathy based other-interest, both of which are jointly pursued within the own-interest. This finding implies that community development strategies need to determine the nature of orientation when internalizing the own-interest of individuals in the community in question. This paper provides direct empirical evidence to support that both self-interest and other-interest motivate the investment of social capital in a well-developed rural community. It also helps understanding why some rural communities achieve a higher state of economic development and community vitality than others. To answer question about what level of self-interest conditioned by the shared other interest works best, will require further testing in various communities, other than just one case study.
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