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Economic Roles of Social Networks in Rural India Open Access


Other title
Social networks, Income diversification, Rural India, network econometric model
Type of item
Degree grantor
University of Alberta
Author or creator
Johny, J
Supervisor and department
Bruno Wichmann (Resource Economics and Environmental Sociology)
Brent Swallow (Resource Economics and Environmental Sociology)
Examining committee member and department
James Rude (Resource Economics and Environmental Sociology)
Sandeep Mohapatra (Resource Economics and Environmental Sociology)
Department of Resource Economics and Environmental Sociology
Agricultural and Resource Economics
Date accepted
Graduation date
Master of Science
Degree level
Rural populations in developing countries face problems of persistent poverty and imperfect markets associated with credit, capital and insurance despite many government efforts and initiatives. This study investigates the role that social networks can play in addressing some of these concerns and provide a new approach to achieving some of the development objectives. There are two main objectives developed for the study: a) to understand the structure and properties of social networks found among rural households and b) to examine the role of social networks in income diversification activities among the rural households. Understanding the structure of social networks can provide important insights into the patterns and regularities of interactions among these households. This in turn can provide new perspectives and recommendations to guide design and implementation of various development interventions in rural areas. Further, income diversification is particularly important for rural poor whose livelihoods primarily rely on rain-fed agriculture and are characterized by poverty, instability and inequality. Social networks could play an important role in influencing and promoting income diversification activities. Data on income diversification and social networks was collected from nine villages in Wayanad district of Kerala, India. Fundamental techniques of social network analysis were used to understand the structure of networks. In order to examine the role of social networks in income diversification, we developed a network econometric model based on a Spatial Autoregressive econometric approach by replacing the spatial matrix with a network matrix. Results from social network analysis provide important insights into the structure and properties of the networks. There are no common demographic attributes among the households who function as central actors in each village. The density of village level networks ranged from a iii low of 15% for the village with the greater number of households to a high of 50% for the village with the lowest number of households. Analysis on differences in node-level centralities by demographic attributes revealed differences in centrality scores by caste of the households. Scheduled castes have highest mean values, followed by scheduled tribes, followed by other backward castes, and general. Results also show that social networks play a positive role in influencing and promoting income diversification. Social network effects were found to have greater influence on income diversification of agricultural households compared to non-agricultural households. Social network characteristics measured by node – level centralities were found to be positively correlated to diversification. Thus this study provides empirical evidence on the importance of social network effects in economic development context and adds to the recent economic development literature on role of social networks.
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