The Effects of Transactions Costs and Social Distance: Evidence from a Field Experiment
B.E. Journal of Economic Analysis & Policy (Contributions), 14(1), 271-96, July 2013
26 Pages Posted: 28 Jan 2014
Date Written: July 1, 2013
We use data from a field experiment at Kiva, the online microfinance platform, to examine the role of transactions costs and social distance in decision-making. Requests for loans are either written in English or another language, and our treatment consists of posting requests in the latter category with or without translation. We find evidence that relatively small transactions costs have a large effect on the share of funding coming from speakers of languages other than that in which the request was written. Social distance plays a smaller role in funding decisions.
Keywords: social distance, translation, transactions costs, microfinance, charitable giving
JEL Classification: D23, G21
Suggested Citation: Suggested Citation