Transcript Social Capital And Attitudes Towards Money

National research university ‘Higher school of economics’
Alexander Tatarko

The objective of this research was to assess one
mechanism through which the individual level
components of social capital that is individuals’
levels of trust and civic identity affect their
economic behavior.
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A lot of studies have demonstrated that societies
that have a special ‘relations resource’, which is
expressed in mutual trust, solidarity and equality
are
more
successful
in
their
economic
development, and people in these societies have
higher levels of subjective well-being and health
(Inglehart, 1999; Kennedy, Kawachi, & Brainerd,
1998).
Macroeconomic effect of social capital:
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contributing directly to economic growth (Helliwell, Putnam,
1995; Knack, 2003),
creating conditions for economic growth (Woolcock, 1998;
Torsvik, 2000),
increasing the share of investments in GDP (Knack, Keefer,
1997; Coates, Heckelman, 2003),
reducing income inequality (Zak, Knack, 2001).
However, the psychological mechanisms that underlay the
effects of social capital on individuals’ intentions and
behavior are not well understood.
Social capital can have a direct impact on certain types of
economic behaviour.
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Financial behaviour of people who have moved from one
region to another is largely determined by the confidence
level in a community where they have moved from, and not
where they have moved to [Healy et al. 2001].
Confidence is associated with the fact that people are
starting to use credits more actively [Knack & Keefer, 1997].
Furthermore it is associated with saving behaviour. It has
been shown to influence saving behaviour in teenagers
[Ssewamala et al. 2010].
In a study of the predictive ability of theory of social capital
in relation to purchasing behaviour, it has been
demonstrated that this theory is useful to predict consumer
behaviour [Miller, 2001].
Measurements of the components of social capital for our research for
individual level propositions.
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a) A central dimension in the conception and operationalization of social
capital by most researchers is the degree of trust that members of a
society have in one another and in the social system (e.g., Fukuyama,
1999; Putnam, 2001). In our research we have estimated generalized
trust (Putnam, 2001).
b) The next dimension of social capital is group identity. Group identity
was considered earlier by other authors as one of components of the
social capital (Nahapiet, Ghoshal, 1998). In our case it will be social
identity or more exactly civic identity.
c) The attitude toward social objects is impossible without their
perception and understanding of them. Consequently, the study of
social capital effects on economic behaviour and economic setting must
necessarily involve the consideration of perceived social capital (Van
Staveren, Knorringa, 2007).

The higher the social capital (perceived social
capital, level of general trust, positivity and
strength of civic identity), the more less are the
negative (by its sense) monetary attitudes
(retention, inadequacy, security and power).
The sample included 634 respondents (304 men and 330
women), aged 20 to 59, with a mean age of 38,4 years and a
median age of 41.
Respondents were recruited in seven different regions of
Russia: Moscow Region- 16,5% of the sample, Irkutsk Region
– 16,4%, Kemerovo Region - 38%, Transbaikal Province 14,6%, Republic of Bashkortostan – 10,8%, Stavropol province
– 3,3%, Chechen Republic – 4,0% .
The sample was relatively highly educated, with 2.4% having
completed general secondary education, 21.1% specialized
secondary education, 21.5% partial higher education, and
55% higher education.
Social capital
1. Perceived social capital: Respondents rated how typical five different behaviors that
express cohesion and reciprocity are among the people in their environment (e.g.,
Behaving respectfully to one another). For that we have used five items on a 5-pt
scale.
2. Civic identity (self-developed instrument). We assessed two aspects of civic identity,
strength and valence, each on a 5-pt scale.
- Respondents indicated the strength of their civic identity in response to the question:
«Do you feel that you identify closely with your country (Russia)»?
- They indicated the valence of their civic identity in response to the question: Which
[one] of the following describes your feelings about your [Russian] nationality (pride,
confidence, none, offence, shame)?
3. Generalized trust. We assessed individuals’ general level of trust with the following
question from the World Values Survey: Generally speaking, do you feel that most
people can be trusted, or that you can’t be too careful in dealing with people?
Monetary attitudes.
We administered the Russian version of the Money Beliefs and Behavior Scale developed
by Furnham (1984; Furnham & Levis, 1986). This scale consists of four sub- scales
that he labeled Inadequacy, Power, Retention and Security.
SRW
Questions
m51 I believe that I have very little control over my
financial situation in terms of my power to change it.
0.49
m52 Compared to most other people that I know. I believe that I think about money much
more than they do.
0.55
m50 Most of my friends have more money than I do.
0.42
m39 I believe that time not spent in making money is time wasted.
0.47
m47 I often argue with my partner (spouse. lover. etc) about money.
0.53
«Power»
m16 I often use money as a weapon to control or intimidate those who frustrate me.
0.84
Chi-square = 3.94; m19 I sometimes feel superior to those who have less money than myself regardless of their
df=2; p=0.14;
ability and achievements.
0.57
CFI=0.99;
m14 I sometimes “buy” friendship by being very generous with those I want to like me.
0.59
RMSEA=0.04
m13 If I have money left over at the end of the.
month (week) I often feel uncomfortable until it is all spent.
0.48
«Retention»
m6 I often have difficulty in making decisions about money regardless of the amount.
0.64
Chi-square = 1.0; m7 I am financially worse off than most of my friends think.
0.61
df=2; p=0.61;
m4 I often say “ I can’t afford it” whether I can or not.
0.53
CFI=1.0;
m23 In making any purchase, for any purpose, my first consideration is cost.
RMSEA=0.000
0.40
«Security»
m21 I firmly believe that money can solve all of my problems.
0.55
Chi-square = 0.68; m28 The amount of money that I have saved is never quite enough.
0.50
df=2; p=0.71;
m38 I worry about my finances much of the time.
0.54
CFI=1.0;
m20 I believe that my present income is far less than I deserve, given the job I do.
RMSEA=0.000
0.52
Goodness of fit
«Inadequacy»
Chi-square = 7.59;
df=5; p=0.18;
CFI=0.99;
RMSEA=0.03
Рath diagrams of four models tested
Chi-square = 43.7; df=30; p=0.051; CFI=0.98; RMSEA=0.027
Chi-square = 29.7; df=20; p=0.075; CFI=0.98; RMSEA=0.028
Chi-square = 35.1; df=29; p=0.21; CFI=0.98; RMSEA=0.018
Chi-square = 22.7; df=16; p=0.12; CFI=0.99; RMSEA=0.026
1. Confirming our basic hypothesis, we found that higher levels of social capital were
associated with were negatively associated with negative (by its sense) monetary
attitudes (Inadequacy, Power, Retention, Security).
2. Monetary attitudes as a means of influence and of protection and the desire to
accumulate it make a person dependent on money and lead to constant concern
about money.
3. As we have interpreted the findings of this research, they suggest that high social
capital, by providing social support that serves as an alternative source of security,
influence, and protection may reduce this dependence on money.
4. An important finding of the research is that the component of social capital that
correlated most frequently and strongly with monetary attitudes was civic identity
(sometimes together with trust). Money may serve as an alternative source of
certainty and security when one loses faith in and commitment to the surrounding
society as a source of meaning and security.
5. Generalizing from our findings, we postulate that the negative association between
monetary attitudes and individual level social capital suggests that, when social
capital decreases, people try to compensate by accumulating financial capital. This,
in turn, leads to a shift in attitudes toward money toward a greater emphasis on
money as a source of security. This interpretation of our findings may help to
explain why societies with low social capital have more corruption and greater
inequality.