Economists and sociologists have long documented the existence of connections between individuals based on similarities in socio-demographic characteristics, which in academic literature received the name status homophily. On the contrary, investigation of connections based on values and behaviour has received yet less attention in the literature, and particularly, in empirical development economics. Based on unique data on networks and behaviour, which we collected in lab-in-field experiments in 68 villages in Burkina Faso, we investigate the existence of value homophily, i.e. connections based on similarities in trust, trustworthiness, risk preferences, patience, altruism, and willingness to donate to the public good. We observe that similarities in social capital and preferences play an important role in building networks. Similarities in the levels of trust and patience are important for building social ties, while individuals with similar risk preferences and patience levels are more likely to build stronger economic ties. We also observe that individuals with different levels of trustworthiness are more likely to build stronger economic ties, suggesting that there may be a fraud or unreliability in economic transactions. Finally, we find strong support for status homophily, i.e. connections based on similarities in ethnicity, religion, gender, age, household size, physical proximity and kinship. The existence of status homophily is found to be robust in both economic and social connections.
Aladysheva, A.; Holmlund, M.; Gilligan, M.; Ouedraogo, M. Does Similarity in Social Traits Breed Connection? Evidence from Lab-in-Field Behavioural Experiments in Burkina Faso. The World Bank, Washington DC, USA (2013) 35 pp.