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Preferences, trust, and performance in youth business groups
Stein T Holden1, Mesfin Tilahun1,2
1School of Economics and Business, Norwegian University of Life Sciences, Ås, Norway.
Plos One
|September 20, 2021
Summary
Social preferences and reciprocity norms significantly influence trust within Ethiopian youth business groups. Altruistic and egalitarian traits foster trust, benefiting group performance and economic development.
Area of Science:
- Behavioral Economics
- Development Economics
- Sociology
Background:
- Ethiopian government initiatives support rural youth through land allocation for business groups.
- Youth business groups engage in sustainable production like apiculture, forestry, horticulture, and livestock.
Purpose of the Study:
- To investigate the relationship between social preferences, reciprocity norms, and generalized (outgroup) and particularized (ingroup) trust.
- To understand the direct and indirect effects of social preferences on trust and trustworthiness.
Main Methods:
- Utilized incentivized experiments to measure social preferences, trust, and trustworthiness.
- Collected data from 2427 members across 246 youth business groups in northern Ethiopia in 2019.
Main Results:
- Altruistic and egalitarian preferences correlated with stronger reciprocity norms, higher trust, and trustworthiness.
- Spiteful and selfish preferences showed inverse relationships with trust and reciprocity.
- Social preferences directly and indirectly influenced trust and trustworthiness via reciprocity norms.
- Ingroup trust positively correlated with group performance indicators.
Conclusions:
- Social preferences and reciprocity are crucial determinants of trust in youth business groups.
- Fostering prosocial preferences can enhance trust, cooperation, and group performance in development initiatives.
- Understanding these dynamics is key for designing effective youth employment programs in similar contexts.
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