Market integration accounts for local variation in generalized altruism in a nationwide lost-letter experiment

Abstract

What explains variation in levels of prosocial behavior across communities? And are members of the ingroup and outgroup treated differently? According to evolutionary theories of generalized altruism, market integration should lead to greater levels of prosociality: Market exchange forces people to interact with unknown others, thus creating the conditions for the extension of prosocial behavior beyond close-knit circles to include outgroup members and strangers. Moving away from the evolutionary focus on cross-cultural variation, this article uses the market-integration hypothesis to explain intracultural variation in levels of prosociality in an advanced society. Taking advantage of an ideal setting, this study reports results from a large-scale, nationwide lost-letter experiment in which 5,980 letters were dispersed in a sample of 188 Italian communities. The study confirms the relevance of market integration in accounting for differences in levels of prosociality: In areas where market exchange is dominant, return rates are high. It also casts a light on the relationship between ingroup and outgroup prosociality: Return rates for both Italian and foreign recipients are the same; they vary together; and ingroup returns are highly predictive of outgroup returns at the community level.