This is why culture stays with us . . . or economics of death

Death anxiety is a primary motivational force that drives much of our behavior. It puts our defenses on high alert, and we make strenuous efforts to repress or deny the unwelcome truth of our inevitable end. The way each of us denies death not only affects life in its broadest sense but also influences the way we behave in organizations. Death anxiety underlies much executive behavior and action. However, traditional motivational theories do not acknowledge the influence of death anxiety on our behavior. Although they attempt to help us better understand employee motivation, they are not sufficiently inclusive. This article takes a clinical lens to explore death anxiety as a motivational force, how it affects behavior in organizations, and how we metabolize the feelings death evokes. In addition, I examine the various ways we deal with our knowledge of death. Some of us go into overdrive in trying to suppress it, while others fall into a state of resignation and depression. To deal with the ultimate narcissistic injury that death represents, we resort to a variety of immortality strategies to create permanent or enduring meaning. Furthermore, from an organizational perspective, three maladaptive responses to death anxiety are explored: the manic defense, succession issues, and the edifice complex.

From a paper by Manfred F.R. Kets de Vries. 

Borders, ethnicity and trade

That is from the paper by Jenny C. Aker, Michael W. Klein, Stephen A. O'Connell, & Muzhe Yang. (Journal of Development Economics, March 2014)

Abstract: This paper uses unique high-frequency data on prices of two agricultural goods to examine the additional costs incurred in cross-border trade between Niger and Nigeria, as well as trade between ethnically distinct markets within Niger. We find a sharp and significant conditional price change of about 20 to 25% between markets immediately across the national border. This price change is significantly lower when markets on either side of the border share a common ethnicity. Within Niger, trade between ethnically distinct regions exhibits an ethnic border effect that is comparable, in its magnitude, to the national border effect between Niger and Nigeria. Our results suggest that having a common ethnicity may reduce the transaction costs associated with agricultural trade, especially the costs associated with communicating and providing credit.

The authors explain:

Despite the absence of natural or political barriers to trade between the two countries, there are several potential barriers to trade in agro-pastoral goods at the international border. One possible source of trade friction arises from currency exchange costs between the Communauté Financière Africaine (CFA) franc of Niger and the Nigerian Naira. Furthermore, there are often costs due to delays at the border (waiting for customs papers) or bribes paid to police officers and customs’ officials.9 Finally, linguistic differences (between the official languages of Niger and Nigeria, French and English, respectively) could also add to transaction costs if trade is conducted in these languages.

That is from this draft (2012, p. 9).  

Identity and Performance

An interesting paper on how culture shapes behavior using caste categories in India

It is typically assumed that being hard-working or clever is a trait of the person, in the sense that it is always there, in a fixed manner. However, in an experiment with 288 high-caste and 294 low-caste students in India, cues to one's place in the caste system turned out to starkly influence the expression of these traits. The experiment allows us to discriminate between two classes of models that give different answers to the question of how someone's identity affects his behavior. Models of the fixed self assume that identity is a set of preferences. Models of the frame-dependent self assume that identity entails a set of mental models that are situationally evoked and that mediate information processing. Our findings suggest that the effect of identity on intellectual performance depends sensitively on the social setting. This perspective opens up new policy options for enhancing human capital formation and development.

That is from a paper by Karla Hoff & Priyanka Pandey. A draft is here. 

A useful explanation

Under the Revealed Mixed and Revealed Segregated conditions, the experimenter began a session by making public the identity of the participants, as described above (p. 13).

Marketing and Economic Anthropology

From an interview with Tyler Cowen 

As more of our economy becomes about marketing this will mean economic theory explains less and less of what’s going on. I think what I call “the economic anthropologists” will rise in importance. It will be hard for them to show that what they’re doing is as equally scientific as the traditional number crunchers, but nonetheless that will be the way to understand what’s actually going on. 

So I’m a big fan of someone like Grant McCracken, who is, in fact, an anthropologist. He spends a lot of his time working with companies, helping them figure out how they can understand what it is their consumers care about and how to grab the attention of those people.

Here Tyler tells his perspective on the difference between economics and anthropology. Tyler himself has done remarkable work on (or with) economic anthropology. His books An economist gets lunch and Markets and Cultural Voices combined, among other things, ethnographic field work, anthropological concepts, with behavioral economics, history, and economic theory (a great interview about the first book is here). 

Here there is a piece on economic anthropology I wrote, its definition and its future. But I missed one of Tyler's main points, which is economic anthropology as a way to analyze consumer behavior, as a complement, and may be as a substitute, of big data analysis (data mining/multivariate statistics). 

The Cost of Funerals in South Africa

We analyze funeral arrangements after the deaths of 3,751 people who died between January 2003 and December 2005 in the Africa Centre Demographic Surveillance Area. We find that, on average, households spend the equivalent of a year’s income for an adult’s funeral, measured at median per capita African (black) income. Approximately one-quarter of all individuals had some form of insurance, which helped surviving household members defray some fraction of funeral expenses. However, an equal fraction of households borrowed money to pay for the funeral. We develop a model, consistent with ethnographic work in this area, in which households respond to social pressure to bury their dead in a style consistent with the observed social status of the household and that of the deceased. Households that cannot afford a funeral commensurate with social expectations must borrow money to pay for the funeral. The model leads to empirical tests, and we find results consistent with our model of household decision making.

From a paper by Anne Case, Anu Garrib, Alicia Menendez, & Analia Olgiati. A draft is here. 

The social norms  

It would be difficult to exaggerate the importance of funerals in South African life. Funerals serve to honor the dead, who are entering a new life as ‘ancestors.’ In addition, funerals mark the deceased’s status (and that of his family) within the community. They also strengthen ties with neighbors and extended family, who may travel long distances to attend the funeral. More than any other single rite of passage – births, graduations, marriages – funerals provide a focal point for family and community life. (See Roth 1999 for discussion.) (p. 5)

For some or all of these reasons, funerals are elaborate, and expensive. In addition to expenses for a coffin, traditional burial blankets, and (often) a tent for the funeral, immediate family must pay to entertain mourners. After a death, extended household members may arrive for a lengthy visit. It is expected that the immediate family of the deceased will feed mourners who have come for the funeral, for as long as they choose to stay. In addition, animals are slaughtered to honor the dead. Precise customs vary from place to place, but in KwaZulu-Natal, when an adult male dies, general custom is to kill a cow, and to use its meat to feed all present. This is an expensive proposition: cattle during this period sold for approximately 2000 Rand a head.3 With median per capita income among Africans (Blacks) approximately 400 Rand a month, the cow represents more than a third of a year’s income for half the African population. When an adult female dies, a goat is slaughtered. While less expensive than a cow, this is still a considerable expense for the household (p. 5).

Great read for a class on culture and economics (or finance).

Education, Language and Identity

The process of individual identity formation is still an enigma, as is the capacity of public bodies to intervene in it. In 1983, the Catalan education system became bilingual, and Catalan, along with Spanish, was taught in schools. Using survey data from Catalonia we show that respondents who have been exposed for a longer time period to teaching in Catalan have stronger Catalan feelings. The effect also appears to be present among individuals whose parents do not have Catalan origins; in addition the reform affects political preferences and attitudes towards the organisation of the State.

From a paper by Irma Clots-Figueras & Paolo Masella. A draft is here.