What are the core assumptions of RCT?
(Assumption 1-3 Iannaconne)
Assumption 1: Individuals act rationally, weighing the cost and benefit of potential actions, and choosing those actions that maximize their net benefit
- Fundamental but simplifying assumption that all individuals approach actions in the same rational way
Assumption 2: Social outcomes constitute the equilibria that emerge from the aggregation and interaction of individual actions
- Not particular to RCT, there are also other theories that assume that we can explain social phenomena as the outcome of the interaction of individuals (= methodological individualism)
Assumption 3: Ultimate preferences (“needs”) that individuals use to assess cost & benefit tend not to vary much from person to person or time to time
- Can only be defended if looked at ultimate preferences, the very basic needs -ofc our everyday preferences like i.e. favorite dish change BUT the underlying more basic need (food intake?) is assumed to be constant
1st assumption - Critique
- The whole idea of “choice” is not very sociological, we should rather focus on structure, culture, and so forth, which leads us to behave a certain way - bc if we think about it too much as the outcome of a choice process, we miss out on the most important factors that shape human behavior - namely the ones that are not subject to human’s choosings (i.e. structure, culture, etc.) -> counter-critique: there is always an alternative, all about the psychology of how I experience my choices
- Parsons: RCT does not consider culture & norms counter-critique: people don’t need to be self-interested or just material gain, could also feel beneficial to them to act within normative guidelines “if I feel morally good, this is my benefit”
- Not neutral as we have so many biases, so, not about objective cost/benfit rather the perceived cost/benefit (i.e. smoking) subjective rationality (quite a vague concept tho from philosophical perspective)
What’s the purpose of assuming constant preferences?
- Bc explaining change by changing preferences gives no ultimate explanation: Not satisfactory as it does not explain why change happened, instantly raises the question of why the preference changed
- RCT rather argues along changing or different constraints i.e. spicier food in hot areas as a result of trying to preserve food
- Iannaconne: “Over time, most people modify their religious choices in significant ways, varying their rates of religious participation and modifying its character, or even switching religions altogether. Given the assumption of stable preferences, the rational choice theorist is almost never content to explain such changes with reference to changed tastes, norms, or beliefs. The theorist seeks instead to model behavioral change (and interpersonal differences) as optimal responses to varying circumstances – different prices, incomes, skills, experiences, technologies, resource constraints, and the like.”
Corollary of assumptions 1 and 3?:
“Behavioral changes (over time) are the consequence of changed constraints; behavioral differences (across individuals) are the consequence of differing constraints.”
Critique of assumption 3 (“ultimate preferences”)
Goal-framing theory - What ultimate preferences will be salient?
To apply economic models to all kinds of sociological phenomena: 4. Assumption
Constraints take a wide variety of forms, explicit and implicit price, income and ability, physical and capital, technology and so forth
What are constraints?
- Most salient: price & cost (very broad view, could also be implicit price: i.e. forgone opportunities = opportunity costs), income
- Overall state of technology (innovation)
- Additional: actor’s state of knowledge, ability, experience, social position
Lindenberg social production function
Base assumptions
- General economic assumption that individual actors behave as if they were trying to maximize their utility
- Also assumes ultimate preferences or how he calls them “universal goals”, such as physical well-being & social approval: Every human being has the desire for physical well-being and social approval, independent of time and place
Lindenberg social production function
Why production?
there is an input and output
Lindenberg social production function
Conditions of production
- elements of social structure and construction of society
- culture = characteristic social production functions for various social positions in various social situations’ (Lindenberg, 1989: 190)
- fits closely with the concept of cultural goals defined by Merton (1967) since the (cultural) rules of production determine which things are ‘worth striving for’
Lindenberg social production function
What do you need to put in to get social approval?
- depends on which society you live in at which times, varies quite a bit from society to society and times to times, in some society it is prestige in others income is more important
- HOWEVER, it does not mean that the universal goal, here social approval, has changed
Lindenberg social production function
Analogy to crime
We won’t say a person is psychologically ill, at least not as first explanation, rather as sociologists we assume they have the same universal goals as we do and so we ask ourselves why is a criminal reaction the most adequate response for them -> quite humanistic view
Lindenberg social production function
View on society
- society = chain of production, in which lower-level goods/goals are invested in order to produce higher-level goods/goals
- input factors are instrumental to production, so they become goals (intermediate goals) themselves
- Everyone tries to be happy, but one cannot always choose one’s own way rather must deal with social constraints -> view of society as constraining people’s choices
- Produces a high level of conformism as straying away from productive way might lead to sanctions/inefficiency
Lindenberg social production function
Alternative to “Investment”
“Consumption” view of human behavior, more fruitful to think of consumption as production, we constantly consume to produce
Example: studying law to become a lawyer, consume brands to produce status
Lindenberg social production function
Hierarchy of social production function + Inequality
- Same idea but more comprehensive depiction: Hierarchy of social production function (vgl. Ormel et al. 1999)
- People differ in the kind of resources they have and can(not) accumulate through their investments which allow for a better/worse need satisfaction –> that’s ultimately why inequality is a problem, some people can live a fulfilled life while others struggle with a low level of subjective well-being
Lindenberg social production function
How can we use hierarchy theoretically?
- Assuming stable higher-order goals, one can use price theory (substitution analysis) to explain changes in behavior (e.g., due to retirement, unemployment)
- Example:
1. How will high-status employees react to retirement? Retirement = external shock loss of status, bc can no longer exercise power & status in occupational field. As social well-being was impacted, the person has to find other ways (substitutes) to fill the void, i.e. through crazy dinner parties or becoming head of the local tennis club, but highly dependent on resources s.o. is equipped with
2. Also useful to understand how different immigrant groups have different strategies not due to culture but bc have different resources (i.e. language, legal status, social networks) and trying to make the best out of those
RCT and Abstraction
One can criticize them in many aspects but RCTs know about the value of abstraction (informational content)
-> willing to disregard certain empirical details (aspects, dimensions) to better fulfill explanatory goals
How & why of abstraction
- How: model-building always means to abstract from empirical details (i.e. map of Germany –> disregard details like trees)
- Ultimate goal: Generate informative and testable implications (when abstract models fail aka implications contradict data, slowly and cautiously replace with more accurate assumptions, e.g., Lindenberg 1992).
Household production model
Assumption 5
Iannaconne analyzes isolated household decisions like church attendance, financial contributions (consciously disregarding interactions & equilibria - there is no strategic interaction in the manner of “I’m not donating bc my neighbors already give so much”
Assumption 5: Individuals/households produce religious commodities by combining money input (for goods and services) + time input
- Testable implication (applying the principle of input substitution): The higher the value of time, the more likely it is that the household will substitute time-saving money-intense forms of production for time-intense money-saving forms
- Meaning: Rich people will invest more money than time as their time is more “valuable”, again about opportunity costs, one could spend the same time making more money therefore more likely to give money than time
Skewness of Giving
Usage of Implication of Assumption 5
Used implication of Ass. 5 to explain: “Skewness of giving” (macro level phenomenon) - 20% of church members account for 80% of financial support, highly skewed (even more than income distribution)
How are rel. commodities produced?
Production function of rel. commodities = f (church attendance, financial contributions)
- Higher income = higher financial expenditures
- Time investment = less sensitive to income
- Propensity to consume religious commodities = largely independent of income
–> high income household will have more expensive vacations but not longer ones. Analogy to church: you will give more, but you won’t spend more time there
Skewness of Giving
Why is it so skewed?
- Church attendance only dependent on underlying religiosity WHILE financial contribution depends on: Household income & underlying religiosity (multiplicative relationship!, i.e. if religiosity = 0, there will be no dollar contribution)
- Furthermore, 2 additional empirical facts:
1. Income distribution = skewed
2. Product of distribution of independent, non-negative distributions will be even more skewed than underlying distributions
Skewness of Giving
3 observable factors
- Percentage rate of giving varies immensely across households
- Income also varies across households
- Little correlation between the amount of income + share of income it donates
Experience effects of household model
Assumption 6 & 7
Additional assumptions to add some realism to model:
- Assumption 6: As individuals and households produce religious commodities, they also accumulate a stock of “religious human capital” that enhances the satisfaction they derive from subsequent religious activity.
- Assumption 7: Most religious human capital is “context specific,” enhancing the real or perceived value of the particular activities, group, and religion that occasioned its accumulation.
Experience effects of household model
Testable implications + critique
- Denominational mobility: rather unlikely, because very costly, most prevalent between similar denominations
- Religious intermarriage: most prevalent between similar denominations
- Timing of conversions: at young ages
- Age-profile of religiosity: participation increases as people get older as religious capital had time to accumulate and participation can become more productive, old people substitute their work relationships with religious community
- Critique: testable implications are no “surprise”, if strong religious identity and strongly embedded socially, already follow - not necessarily specific from RCT
