The article "Cents and Sociability: Household Income and Social Capital in Rural Tanzania" by Deepa Narayan and Lant Pritchett explores the relationship between social capital and household income in rural Tanzania. The authors define social capital as the quantity and quality of associational life and related social norms, and they use a large-scale household survey (Social Capital and Poverty Survey, SCPS) to measure this concept. They find that a village's social capital has a significant and positive impact on the incomes of households within that village, suggesting that social capital is both capital and social. The study uses instrumental variables estimation to show that this effect is causal and operates at the village level, rather than being a result of higher incomes leading to greater social capital. The authors also examine several mechanisms through which social capital affects income, including improved public services, agricultural practices, and community cooperation. The findings highlight the importance of social capital in poverty analysis and suggest that policies should consider the role of local conditions and community capacity in fostering social capital.The article "Cents and Sociability: Household Income and Social Capital in Rural Tanzania" by Deepa Narayan and Lant Pritchett explores the relationship between social capital and household income in rural Tanzania. The authors define social capital as the quantity and quality of associational life and related social norms, and they use a large-scale household survey (Social Capital and Poverty Survey, SCPS) to measure this concept. They find that a village's social capital has a significant and positive impact on the incomes of households within that village, suggesting that social capital is both capital and social. The study uses instrumental variables estimation to show that this effect is causal and operates at the village level, rather than being a result of higher incomes leading to greater social capital. The authors also examine several mechanisms through which social capital affects income, including improved public services, agricultural practices, and community cooperation. The findings highlight the importance of social capital in poverty analysis and suggest that policies should consider the role of local conditions and community capacity in fostering social capital.