Choosing Meaning Over Money?
Ethnographic and Field Experimental
Evidence from a Handicraft Cluster in
Southern India
Aruna Ranganathan
∗
September 30, 2013
∗
MIT Sloan School of Management. Direct all correspondence to arunar@mit.edu.
I would like to thank Evan Apfelbaum, Stuart Bunderson, Lotte Bailyn, Curtis Chan,
Jane Dutton, Roberto Fernandez, Oliver Hahl, Kate Kellogg, Paul Osterman, Mike Pratt,
Ray Reagans, Ofer Sharone, Yanbo Wang, Amy Wrzesniewski, participants of the ASA
Economic Sociology session, MIT’s IWER seminar, Economic Sociology seminar and Economic Sociology Working Group, and especially Abhishek Nagaraj, Susan Silbey, Tavneet
Suri and Ezra Zuckerman for comments. I am also deeply indebted to Gowramma and
her team at IFMR, Manjula Kale and the field research team, and myriad informants and
interviewees in Channapatna. All errors remain mine.
Abstract
An ethnographic and field experimental study of artisans and traders
in the Indian handicraft cluster of Channapatna illustrates the differential impact of calling and job work orientations on economic behavior. I find that traders, who merely retail craft products as a job,
focus on monetary outcomes from the selling process, while artisans,
in pursuing a higher calling in their craft work, develop psychological ownership over their handmade products and care additionally
about buyers’ appreciation for their craft. Data from participant observation, interviews and a survey is used to characterize the lives and
work practices of artisans and traders in Channapatna and to hypothesize the relationship between differing work orientations and selling
outcomes like prices, bargaining intensity and transaction length. Empirical evidence from a field audit study supports these hypotheses by
showing that, when faced with discerning auditors, artisans engage in
longer transactions, bargain less and give significant discounts while
traders do not, focusing solely on auditors’ willingness-to-pay. These
results make empirical and theoretical contributions to the literature
on meaning of work by causally establishing that work orientation
impacts market outcomes and by identifying the mechanism of psychological ownership regulating these effects.
“It’s like bringing up a child when you are an artisan. You get
that satisfaction when you see your product transform from the
raw wood to the final shape, like them taking the first footsteps,
then getting shapes, then making their initial forays into the market, and finally, you have to sell them. It’s like holding their hands
through this whole process and then giving them away. It’s more
than the money.” (Artisan in Channapatna)
Individuals derive vastly different meanings from the work that they do
(Rosso et al., 2010; Pratt and Ashforth, 2003). As a way of characterizing the predominant meanings attached to the activity of work, scholars
have described two contrasting work orientations – job versus calling (Bellah
et al., 1985; Baumeister, 1991; Wrzesniewski et al., 1997).1 Those with a
job orientation are seen to pursue their work for its material benefits rather
than for other kinds of meaning or fulfillment. This orientation is one where
work is primarily a means to a financial end, allowing for the enjoyment of
other activities in time away from work. In contrast, those with a calling
orientation are seen to work not for financial rewards but primarily for the
fulfillment experienced in engaging with work (Bunderson and Thompson,
2009; Dobrow, 2006). Here, work is an end in itself, or an expression of one’s
deepest self (Dik and Duffy, 2009; Hall and Chandler, 2005). Such a calling
orientation is thought to develop in concert with one’s work, ultimately making work deeply meaningful, purposeful and significant (Pratt et al., 2013;
Wrzesniewski, 2010).
Scholarship on meaning of work not only describes different work orientations
but also finds that individuals who have a calling orientation are associated
with a number of distinct work-related attitudes and behaviors. Early work
implicates a calling orientation with a strong work ethic and the pursuit
of success, responsible for the modern capitalistic enterprise (Weber, 1930;
Hardy, 1990). In recent empirical studies, workers with a calling orientation
are seen to be more motivated in their job (Wrzesniewski et al., 2006), have
lower levels of absenteeism (Wrzesniewski et al., 1997) and greater identification with their occupation (Dobrow, 2006). These characteristics mean
1
A third orientation - career - focusing on advancement in an organizational setting
has also been discussed, though this approach to meaning-making is less universal, in that
it is not applicable to the broad range of jobs that operate beyond the realm of full-time,
regular employment at a living wage within formal organizations, including most jobs in
the informal sector and in developing economies (Rosso et al., 2010; Brief and Nord, 1990).
1
that workers with a calling orientation seem to be associated with higher
levels of performance (Hall and Chandler, 2005) within the organization and
higher levels of work, life and health satisfaction (Wrzesniewski et al., 1997;
Dobrow, 2006). While a calling orientation is mostly associated with positive work-related characteristics, scholars have also recognized that a sense of
calling might be a “double-edged sword”, where individuals trade pay, personal time and comfort for the moral duty associated with work (Bunderson
and Thompson, 2009).
While the general claim in this literature seems to be that a calling orientation has important consequences for economic and work-related outcomes,
such a causal claim suffers from three significant challenges. First, this
research has had limited success in accurately and consistently measuring
the outcomes that it aims to investigate. A number of these studies that
relate work orientation to individual and firm-level outcomes rely on selfreported and survey-based measurements that suffer from well-known issues,
namely their subjective and often retrospective nature, response bias and
limited comparability across the population of respondents. Second, these
studies are unable to rule out alternative explanations to the theorized link
between work orientation and the outcomes of interest. For example, workers with a calling orientation could also have systematically higher levels of
human capital, leading to superior performance. Such individual-level and
organizational-level factors can often be mistaken for a calling orientation.
Third, with the notable exception of Wrzesniewski et al. (1997), most studies
analyze the behavior of only those workers who are suspected to have a calling orientation in isolation, therefore omitting counterfactuals or comparison
groups that might have other orientations to work. The presence of such
a counterfactual is crucial to identifying the differential influence of work
orientation on resulting behavior. Therefore, while these studies are able to
successfully show the association between a sense of calling and a number
of important work-related outcomes, the causal direction of these claims is
open to critique.
Wrzesniewski (2010) summarizes the state-of-the-art by saying that “to date,
much of the empirical research on callings has been correlational in design”
and highlights the need for research that helps us unravel the causal relationship between work orientation and economic outcomes. Pratt et al. (2013)
agree that “there is more theoretical than empirical support for [the literature’s] claims” and call for more research to investigate whether work ori2
entations vary in meaningfulness experienced by individuals. Further, while
extant research on work orientation has been foundational in helping us describe the origins of a sense of calling and the experiences of those with a
calling orientation, even theoretically, we have few explanations of how, if at
all, work orientation should affect the economic activity of workers. Setting
aside the empirical difficulties of measurement and causal identification of
the impact of a calling orientation, we have little understanding of the mechanisms through which work orientation operates in practice. Under what
conditions will workers with a calling orientation be seen to go beyond the
call of duty or make sacrifices for their work? If one is to fully explain the
causal link between a calling orientation and economic outcomes, then the
lack of such theory is sorely felt.
In this paper, I present results from a study that helps us make progress
on both the empirical and theoretical link between work orientation and
economic outcomes. The study is based on data from eight months of ethnographic fieldwork and an audit study where trained buyers are sent to purchase a standardized product from a community of wooden handicraft workers in an isolated town in southern India. Workers in this community can
either be traders, who retail handicraft products with a job orientation or
artisans, who both produce and retail the exact same products, with a calling orientation towards work. The setting helps us address problems in the
existing literature by comparing two groups of similar workers- artisans and
traders- who are engaged in the same activity of selling but vary significantly
in their orientation to work, in a field-experimental setting that rules out
alternative explanations, and by focusing on objective and comparable outcomes such as the prices offered by these different sellers. The setting has
the additional advantage of studying a group of workers facing poverty, with
no savings or alternative sources of income, offering perhaps the strongest
test of whether a calling orientation has an impact on work outcomes.
The qualitative data first demonstrates that artisans and traders subscribe
to different work orientations and contrasts the quite different work practices associated with these different orientations. Building on recent work
that examines the different elements of a calling orientation (Pratt et al.,
2013), I document how artisans’ calling, in this case, stems from a “craftsmanship orientation” towards their work – an orientation where meaning is
derived from a job done well, for its own sake. I then illustrate how this
craftsmanship orientation leads artisans to develop an emotional connection
3
with the products that they painstakingly craft, drawing on the literature
of psychological ownership (Pierce and Jussila, 2011), which examines the
sense of possession that individuals experience over inanimate objects. The
paper presents data to show that it is through this mechanism of psychological ownership that we can begin to make predictions about the impact
of work orientations, namely that workers with a calling orientation, unlike
those with a job orientation, will develop a preference to sell to discerning
buyers who will take care of their products beyond the point of sale.
In order to test this hypothesis that a sense of calling developed through a
craftsmanship orientation manifests as a preference to sell to certain buyers,
I conduct a field experiment that measures the impact of work orientation on
the prices charged, bargaining intensity and transaction length of artisans and
traders with three experimentally-manipulated auditor groups, varying in the
taste that they demonstrate for craft products. The results show that artisans
offer discerning and appreciative auditors significant discounts (upto 50%) for
their products even when these buyers have a higher willingness-to-pay, such
as in the case of foreigners. Traders, who have a more job orientation, on
the other hand charge wealthier buyers higher prices, ignoring the auditors’
level of appreciation for the craft. Artisans are also seen to bargain less
and engage longer with buyers who display a taste for their products, while
traders bargain and engage equally with all buyers.
The results, drawing on novel methods, point quite clearly to the causal link
between work orientation and market outcomes. The study also helps us
validate a novel theoretical mechanism that links one type of calling, i.e. a
craftsmanship orientation, to market outcomes through the channel of psychological ownership over work-output. Finally, by uncovering the significant
impact of a calling orientation and meaningful work in a developing country context where workers are extremely poor, the study informs the design
of labor market institutions and jobs for low-income workers in these contexts.
SETTING AND METHODS
In the summer of 2011, I began fieldwork in various parts of India, conducting exploratory research on artisanal, craft markets. Over the course of
4
this exploration, I visited a number of clusters, each based around a single
artistic technique (tie-and-dye, mirrorwork, block printing etc.) and discovered a theme that unified the labor markets in each of these settings. Each
cluster was characterized by the presence of an artisanal community that
crafted products by hand and sold them locally in their worksheds and a
trading community that was responsible solely for the sale of these products to a wider market through retail establishments. While both sets of
workers faced financial distress, artisans displayed a rather remarkable level
of attachment towards their work, while traders had a more dispassionate
outlook, where the products that they were selling were merely a means towards an end. Equipped with this inductively-developed understanding of
artisanal and trading communities across India, I decided to focus in-depth
on one cluster that was a part of my initial sample, the Channapatna wood
and lacquerware craft cluster in southern India.
Channapatna has a three-hundred year long tradition of wood and lacquerware handicrafts and about 10% of Channapatna’s 60,000 people are artisans
and traders, involved in the production and retail of handmade articles like
wooden jewelry and toys (Aziz, 1979). Apart from the richness of its craft
heritage, as a research site, Channapatna offered several advantages. First,
the artisans and traders in Channapatna were similar along a number of key
dimensions, differing only in their work orientation. Members of both occupations are male, married, literate, usually in their mid-forties, belong to
what are designated in India as backward castes,2 have families of about five
or six people and have been practicing the occupation for about twenty years
each, having inherited it from their family. A survey I conducted, whose
findings are summarized in Table 1, points to a few small differences in these
two groups. Traders are slightly more educated as compared to artisans, are
more likely to be Hindu rather than Muslim and make about $160/month as
compared to artisans who make $70/month.3 Both groups are however quite
poor, buried in debt with an average loan size of $2,000 and live in rather
shabby houses without tiled flooring or modern kitchens.
INSERT TABLE 1 ABOUT HERE
2
includes Scheduled Castes (SC), Scheduled Tribes (ST) and Other Backward Castes
(OBC) as defined by the Indian Constitution
3
While these gaps might be a cause for concern, Figures A.7, A.8 and A.9 establish
that the final results are robust to these differences.
5
Channapatna also proved to be an excellent research setting in order to
study artisans’ and traders’ selling behavior, the focus of this paper. It
is a remote market located on a major highway between two large cities
(Bangalore and Mysore) and receives local and international tourists, who
purchase products from both traders and artisans (see a map in Figure 1).
These transactions are typical of those in the informal economy: prices vary
and are set by bargaining, relationships between buyers and sellers are onetime, devoid of reputational incentives (over 90% of artisans and traders
reported never selling twice to the same direct customer), products are not
branded or signed, sellers operate independently and there is no audience for
any given sale. These conditions make it a favorable venue to situate an audit
study to investigate the impact of work orientation on the selling process,
where objective data on selling outcomes can be collected, selling outcomes
can be compared with a couterfactual group and experimental variation and
features of the setting help to rule out alternative explanations.
INSERT FIGURE 1 ABOUT HERE
Data Collection
It was with these advantages in mind that I began fieldwork in Channapatna
in January 2012. The data I collected over eight months is based on participant observation and twenty two semi-structured interviews, in addition to
a formal survey and a field audit study. The qualitative data was collected
inductively and experimental methods were used to test hypotheses emerging
from an enriched understanding of the field.
When I arrived in Channapatna, I stayed at a small lodge that offered proximity to both artisanal localities and trading establishments in town. By the
end of my first week of fieldwork, the news of my presence in Channapatna
had spread throughout the community, making access straightforward. Although the locals did not understand what research or academia meant, my
interest in studying how handicrafts were made and sold and how work life
was organized in Channapatna led them to trust me and, as a single woman
in a predominantly male occupation, regard me as “harmless”. While, as a
researcher from the US living amongst the artisans, I enjoyed some celebrity
6
status, with a train of children accompanying me wherever I went, being of
India origin, I wasn’t completely foreign and blended in quite well.
During the day, I would observe artisans and traders at work, paying special
attention to their work practices and routines. For example, I would observe
an artisan’s process of creating a product from start to finish and his attention
to the minutest of details or a trader’s dealings with a large number of buyers
of different kinds. In addition, in the evenings and over meals, artisans,
traders and I would talk about the day’s work and events (Spradley, 1979).
Apart from my ability to communicate in Hindi, I also developed a working
understanding of Kannada (the state language) that allowed me to speak with
a diverse set of local people over time. Artisans, in particular, were keen for
their stories to be told and they seemed to open up to me, even more than
to their colleagues or families because, unlike their family members, I asked
about their work and took interest in their lives. I decided to carry a visible
notebook from the beginning and let people see me jotting notes at all times,
bringing out their expressive best, making them feel important each time I
wrote down what they said.
Finally, at the end of each day, I would make sure that I had documented all
salient observations. I structured my time so that I was in the field for three
days a week and spent the rest of my time in Bangalore typing up field notes,
writing memos and making sense of the emerging data. This worked well
because the time away from the field helped me identify puzzling observations
that would inform the following week of my fieldwork. In this way, fieldwork
included intensive participant observation of the artisans’ and traders’ dayto-day work, including observation of over sixty artisanal worksheds and
visits to more than thirty trading establishments in the area.
In addition to participant observation, I conducted twenty-two formal interviews with artisans and traders whom I had met in the course of fieldwork.
My interview sample captured diversity in religion and size of establishment
(Trost, 1986). I used these interviews to probe deeper into how artisans
and traders understand and make sense of their work (Spradley and Baker,
1980). The semi-structured interviews were conducted in Hindi and lasted
an average of one hour. Over the course of the interview I would cover most
topics ranging from how the sellers had entered their occupation, how they
experienced their work, what they liked and disliked about it, their daily
routines and practices, the problems that they experienced and views about
7
their family, town, and occupation. Each interview was digitally recorded
and after every interview, I recorded my impressions of the interviewee, his
house, workplace and family members. Beyond these formal interviews, I also
conducted over fifty informal ones in the midst of my participant observation
(Barley and Kunda, 2001).
Finally, in order to paint a complete quantitative picture of the artisans and
traders in Channapatna, I conducted a survey of 52 artisans and 23 traders
who would also participate in my field audit study.4 Conducted at the end of
my fieldwork, these surveys collected (a) descriptive data including age, family information, household assets, religion, education and leisure activities,
(b) workplace data such as tenure in the profession and machinery owned,
(c) occupational data regarding work practices and norms such as time spent
working, knowledge of other crafts, generational shifts and secondary occupations, (d) financial data about income, prices and expenditure on raw
materials and (e) sales data by different customer groups. The nineteen page
survey, translated into Kannada, was developed through an iterative process
of referring to field notes, relevant literature (Aziz, 1979), and in consultation
with handicraft and survey experts. The survey was administered by three
trained surveyors who read the questions aloud, elicited responses and filled
out the surveys on behalf of the respondents. An individual survey took
about 30 minutes to complete and respondents were compensated for their
time away from work.
Data Analysis
The open-ended data, comprising over 500 pages of fieldnotes and interview
transcripts, was analyzed inductively using Atlas.ti. My inductive analysis (Glaser and Strauss, 1967) consisted of multiple readings of field notes
and interview transcripts and extensive memo writing to decipher patterns
in how artisans’ strong connection with their work manifested in their economic behavior. In my coding of the data, I associated passages of text with
one or more mnemonic codes, labeling different ways in which artisans and
traders talk about and understand their work. Some of these codes referred
to uniqueness of products, artistic quality, product variety, creativity, atti4
There were 25 traders in the experimental sample but only 23 trader survey responses
because one trader owned two shops and one trader refused the survey.
8
tude towards money, passion, selling behavior, sincerity towards work, work
routines, competition, references to organization of work, control over work,
reputation, work commitment and pride. In this way, the theorizing and
analysis of the data proceeded iteratively.
This process of data collection and inductive data analysis revealed the
starkly different orientations that artisans and traders possessed towards
their work, which is the focus of this study. The following sections draw on
the qualitative data to describe the different orientations of workers in Channapatna and develop hypotheses for the field experiment to follow.
JOB VERSUS CALLING ORIENTATION
Everything is about money only, no? Why else would we work?
People steal also, for money only. Without money, we have nothing. Even the cocks wouldn’t wake up in the morning without
money. (Trader)
I love this work...I put my heart and soul into it..it’s more than
the money. (Artisan)
Despite being similar along a number of dimensions, my fieldwork identified
how traders and artisans differed in their orientations towards the work that
they do, as hinted by these quotes. Using my participant observation and
interviews, I describe the work practices and beliefs that show how traders
and artisans approached their work in accordance with job and calling orientations respectively.
Bellah et al. (1985) argued that individuals with a job orientation approach
work as an instrumental activity to provide the resources necessary to pursue
activities outside of work and to attain financial security. Traders in Channapatna imbibed such a job orientation, repeatedly talking about “money”
and the “monetary gains from the sale of their products,” and explicitly
articulated these monetary motivations. One trader confessed:
We work for money. Even my wife understands this. My wife
asks [me] for money and if I don’t give her enough, then she asks
“what is the point [of] your work?”. So ultimately I work for
9
money.
As Bellah et al. (1985) further noted, even though people with a job orientation do not approach work as an end in itself, they are likely to value hard
work and individual initiative. Traders in Channapatna similarly valued the
drive and skill to make a “good” sale. For traders, the ability to sell and
make profits is linked not to the quality or innovation of the product, but
the skills of the traders themselves, a classic indicator of a “job” orientation
to work. Traders whom I interviewed spoke of this skill:
Everyone can sell a good product. But us traders, we take pride
in the ability to sell even a broken product. For that you need
intelligence. You have money but no brain..I have brains but no
money..who will do better? Me.
Traders were skilled appraisers of handmade products that they sold and
yet they demonstrated no attachment to the wood and lacquerware craft or
appreciation for its intrinsic artistic quality. I repeatedly heard quotes like
“of course we know if the wood is adequately seasoned” and “we’ve been
seeing this for generations,” and yet, very rarely, did I hear a trader regard a
particular product as being beautiful or well crafted. For traders, products
were simply the means to a financial end:
You have to just repackage the old designs as new designs. Each
one is a different price. We just need the intelligence to make
sales.
Another signal of the lack of attachment that traders had towards the products that they sold was revealed in the relative ease with which they would
stock cheaper, machine-made Chinese products and Chinese imitations right
next to their Channapatna counterparts, a practice that infuriated artisans.
I saw a number of trading establishments where traders had imported a large
quantity of plastic Chinese products, responding to financial signals and market conditions in their decision-making rather than to an attachment with
the craft. When explaining why more than half of the traders in Channapatna now stock products from China that “copy [local] designs”, “are of
lower quality” but “look the same” a trader explained:
Well the material costs are increasing, what do you do? The cost
of production doesn’t get adjusted [on its own], so one solution
is to buy cheaper raw materials..or else lower the quality of the
10
products.
In contrast to the traders, artisans displayed a very different orientation towards the work of selling handicraft products. Artisans personified a calling
orientation, validating (Bellah et al., 1985, pp 66)’s original and most-cited
definition of a calling as something that “has value and meaning in itself,
not just in the output or profit that results from it.” Here, work is pleasurable, fulfilling and intrinsically valued. Artisans, distinguished by the fact
that they make and sell their own handicraft products, frequently described
“loving their work” and “enjoying their work” and took pains to describe
that they were not in this profession for money and that “if [they] wanted
to make more money, [they] could have left a long time ago.” An artisan I
spoke to made this orientation clear:
This is my work. I get a lot of satisfaction...It’s not like other
work, where you work for money or some other material thing.
In fact, artisans in Channapatna took their calling orientation to an extreme,
where they deified the very process of work and saw their craft as being sacred
(Harrison et al., 2009). As one artisan said, “work is God for us.” To be clear,
artisans developed devotion towards their craft in concert with doing their
work, loving their work and becoming emotionally and spiritually attached
to the work processes, rather than as a result of an invitation from God to a
vocation through which God’s will is accomplished. Artisans worshiped their
work, not as a service to God but for its own sake.
In addition to interview data, a few workplace practices drove home the fact
that artisans viewed their work to be a form of worship. First, artisans in
Channapatna always worked without footwear despite the workplace being
filled with sharp wood chips and sawdust, citing Indian custom where it
is inappropriate to wear footwear in a place of worship like a temple or a
mosque. The consequence of this was that there was not one workshed that
I visited where I did not see an artisan with cuts and cracks on his feet from
the sawdust and splinters of his workshed floor. When asked why they don’t
wear footwear despite the safety implications, the idea seemed nonsensical to
one artisan - “Do you wear chappals[footwear] inside the house of god?” he
replied.
In accordance with the workshed being a place of worship, artisans elevated
their tools and machinery to the level of God, treating them like idols inside
11
a temple. While lax about both personal safety and standards of hygiene,
artisans would go to extreme lengths to ensure that their machinery and tools
are kept clean. I even observed several artisans worship their implements by
offering flowers, lighting incense sticks and rigorously cleaning their machines.
This practice was widespread even though machines were rendered dirty and
covered in sawdust the minute they were turned on and the work commenced.
A factory owner in the trade whom I spoke to, explained to me why this
practice of multiple cleanings per day was so prevalent:
People carry that kind of devoted attitude towards work. They
clean their machinery daily. People treat their machinery as god.
I see people cleaning their machines in the morning and evening,
twice a day just like we pray twice a day.
In order to understand how the sense of calling that we see in the case of
Channapatna artisans might influence market outcomes, it becomes incumbent to understand it in the context of the typology first introduced in Pratt
et al. (2013). According to this model, a sense of calling can arise from three
distinct sources, through “doing well” leading to a craftsmanship orientation,
through “doing good” leading to a serving orientation and through “doing
with” leading to a kinship orientation. While a serving orientation is thought
to characterize those who evaluate work as worth doing when it betters the
lives of others or serves a cause, and a kinship orientation describes those who
love work when it creates close, familial bonds with others, the focus of the
craftsmanship orientation is on the work itself. Those with a craftsmanship
orientation evaluate work as worth doing when it is done well for its own
sake and conducted with skill and expertise, developing pride in the output
and viewing it, not as a means to an end, but the end itself (Sennett, 2008;
Crawford, 2009; Mills, 1956). It is this notion of calling through a “craftsmanship orientation” that best describes the artisans in Channapatna. This
is reflected in the following quote by an artisan:
Every time I make something creative,.. I feel blessed [to have]
the skill and heritage I have gotten... [and] want to keep him [the
product] close.
While Pratt et al. (2013) guides us in broadly defining a “craftsmanship”
orientation, the case of artisans in Channapatna can help us understand how
a “craftsmanship” orientation might play out in practice, particularly with
respect to how artisans come to view their hand-made products and how this
12
ultimately affects their selling behavior. In the next sections, I outline three
broad themes that organize artisan’s outlook towards their work output and
build on the literature of psychological ownership to develop hypotheses that
will guide the design of the field audit study.
Psychological Ownership over Products
Through my fieldwork, I discovered that a key factor distinguishing artisans’
craftsmanship orientation is their relationship with the products that they
make and sell. This relationship develops in the process of hand-crafting
products. The production process consists of multiple stages, and at each
stage the artisan must apply considerable skill and expertise. Through this
process, artisans transform raw wood to finished products that have been
carved, dyed and polished. Every stage of the production process calls for a
painstaking application of skilled technical principles while at the same time
allowing for a full expression of the artisan’s creative talents, leading to a
strong bond with the final creative product. It is through this production
process, illustrated in detail in Figure 2, that artisans seem to develop an
emotional connection with every piece that they make. In fact, artisans come
to treat their products like “babies”, part of their very embodied selves. As
one artisan said:
When I make the piece, I get attached to it. After seeing the
design, I convert the shape on wood and after seeing the final
product, I become happy. I [develop] affection for it.
In order to understand how artisans’ strong relationship with their products
affects their selling behavior, in this section, I draw on my fieldwork to organize artisans’ outlook towards their products under three broad themes:
personal sacrifices, intimate knowledge of products and a desire for control.
INSERT FIGURE 2 ABOUT HERE
Personal Sacrifices. First, a craftsmanship orientation means that artisans subordinate themselves to the skilled practice of making handicraft
products with their hands, putting all of their energy and time into making
13
sure that each piece turns out to be beautifully made. To this end, artisans
make a number of personal sacrifices for the well-being of their work and
products. For example, while it is recommended practice that woodworkers
wear safety glasses5 and despite being handed eyeglasses for free by the government, artisans in Channapatna refuse to wear them. Glasses impede the
artisan’s ability to pay close attention to minute details in their designs, and
artisans happily trade artistry over their personal safety. One artisan I spoke
to attested,
I [...] get dust in my eyes and would fall sick. I put my finger in
to take it out but sometimes cannot. Because they mix chemicals
in [the wood], it’s painful ... [but] When I work on the lathe, if
I put on the shades [eye glasses], I am unable to see the wood as
carefully [as I want to]. So no one wears them.
Intimate Knowledge of Products. Second, a craftsmanship orientation
implies a deep knowledge and connection with the products that artisans
make. Each product begins its life as a piece of wood, which must be turned
on a motorized lathe in order to give it a desired shape, much like a potter does clay on a wheel. Once a piece of wood has been given the desired
shape, artisans apply layers of lacquer that have been previously dyed using
vegetable colors, then shade it expertly to produce a variety of effects, and
finally use a locally available leaf to polish the product to obtain its distinctive glossy appearance. Thus, each piece that the artisan makes reflects his
artistic vision and the unique choices that he has made during the production process and it is through these choices that artisans come to identify
their own products. One artisan I spoke to described how he has intimate
knowledge of every product that he makes:
No two bangles look exactly the same due to the nature of the
polishing and coloring process. I can identify my red bangle,
among a sea of seemingly similar red bangles.
5
An online manual (http://woodworking.about.com/od/safetyfirst/tp/safetyRules.htm)
states explicitly that “there is no time in the wood shop that you should be without your
safety glasses. Your eyesight is too important to take chances.”
14
Control. A final feature that describes artisans’ relationship with their
products is the desire to retain control over the product both during the
production process and after it has been manufactured. Given the artistic
nature of the process, one of the things that artisans enjoy the most is their
ability to control the shape, color and design of each product. One artisan I
spoke to said:
We like to do our own pieces, create them with new designs, new
colors and keep samples for our memory..we don’t want to become
operators in a factory.
Similarly, once a piece has been produced, artisans display a keen desire
to control where it ends up. One practice that I observed was that artisans
would keep products that they treasured most, enshrined in their closet. This
is a widespread practice, as evidenced by the fact that on my first visit to
any given artisan’s home, he invariably fetched a handful of unique self-made
artifacts from a closed cupboard in his bedroom and introduced me to each
one of them, like a parent would introduce their children.
In this way, the sense of calling that artisans experience through their work is
distinguished from other forms of calling by the unique relationship that artisans come to have with their products, characterized by the personal sacrifices
that they make, deep knowledge of their products and a desire for control
over work. Instead of talking about these ideas separately, the literature on
psychological ownership offers a useful construct that helps us unify these
themes. The construct of psychological ownership is based upon a sense of
possession (“It is mine!”) as well as an affective relationship with the creation
since calling something “mine” implies an emotional linkage (Pierce et al.,
2001; Pratt and Dutton, 2000). Similar to the case of a calling developed
through a craftsmanship orientation described above, psychological ownership is theorized to develop through three key mechanisms: (a) investment
of self, (b) intimate knowledge and (c) control over the target that is being
owned (Rouse, 2013; Pierce and Jussila, 2011; Pierce et al., 2003).
The notion of investment of self is linked with the idea of psychological
ownership because, as Locke (1690) argued, “we are likely to feel that we
own that which we create, shape, or produce ... through our labor, we not
only invest our time and physical effort but also our psychic energy into
the product of that labor.” Scholars have also pointed to the willingness to
assume personal risk or make personal sacrifice on behalf of a creation as an
15
important aspect of investing oneself in work (Pierce et al., 2003). Intimate
knowledge of the product defines the notion that people are psychologically
tied to things as a result of their active participation or association with
those things (Weil, 1952). The most obvious and powerful means by which
individuals develop such intimate knowledge of objects is by creating them
(Pierce et al., 2003). Finally, control illustrates the idea that much like the
parts of our body that we can control, material objects that can be controlled
come to be regarded as part of the self, establishing a sense of psychological
ownership (McClelland, 1951).
Artisans, as described above, are also seen to invest their self in their products
through personal sacrifice, develop intimate knowledge of the products that
they craft and have a keen desire to control the production and sale process
of their output. A sense of psychological ownership that develops through
these three key mechanisms can therefore by used to describe artisans’ relationship with their products emanating from a craftsmanship orientation.
More broadly, a sense of calling developed through a craftsmanship orientation can be summarized to be different from a kinship orientation or a serving
orientation by the fact that workers with such an orientation evaluate work
as worth doing when they have the opportunity to develop psychological
ownership over their work.
Traders, on the other hand, have a very different relationship with the products that they sell. In my fieldwork, I observed that even though traders had
the capacity to distinguish well-made products, as evidenced by quotes like
“we can see and tell apart the good wood [from the bad wood]” and “we can
identify if the color has been applied well,” never did this expertise translate into an appreciation for exquisitely-crafted products. In fact, the reason
that traders cared about the wood being well-seasoned or the color being
smoothly-applied was to ensure that these products would still be in good
condition by the time they reached the marketplace. Well-made products,
for traders, were products that customers would find beautiful irrespective
of their personal taste. Ultimately, every product was valued only according
to the profit that it would fetch as demonstrated by this quote:
Today I sell one thing, tomorrow another, its all the same.
16
Preference over Buyers in the Selling Process
The previous section demonstrates that artisans with a calling orientation
have psychological ownership over the products that they make and sell,
while traders with a job orientation do not. This key difference manifests in
the preferences that artisans and traders have over buyers to transact with
in the selling process.
The literature on psychological ownership highlights that creative workers, in
particular, pay inordinate attention to the process of handing over their creative ideas or physical creations to coworkers or customers, once their work
on the project culminates (Rouse, 2013). Such a “handoff” entails a shift
in formal ownership, where the creator no longer has access to her creation
and the receiver, to whom the creative work is handed over, assumes primary
responsibility for the creation. Because workers are psychologically invested
in their creations, having built a prolonged relationship with them, studies
find that they care about the identity of the receiver, to whom the creative
work is handed over (Rouse, 2013). Above all, workers need to trust that
the receiver of their creation is competent before handing off their product
(Colquitt et al., 2007). Similarly, workers need to know that the receiver
will perform actions important to them, such as taking care of their “baby”
after the point of handoff, irrespective of their ability to monitor the receiver
(Mayer et al., 1995). In studying “handoffs” between different game developers in the video game industry, Rouse (2013) documents workers’ desire to
give their products to “safe hands” for the safety and future development of
their creations.
In line with the predictions of this literature, I too observed that artisans’
psychological ownership over their products engenders a preference to sell to
certain buyers. Artisans seem to care about selling to discerning buyers, who
display a taste for craft work and will treat their products well even beyond
the point of sale. In my observation, instead of behaving like traditional
sellers who care primarily about the monetary consideration that they will
receive for the product, artisans behaved more like adoption agencies who
care acutely about the home that their babies will find. In other words,
artisans derive value not just from finding a buyer for their product and
charging the highest price possible, but also in ensuring that the right buyer
is found, one who will take care of the product, appreciate its value, and
17
show it off in aesthetically pleasing ways. In particular my interviews suggest
that artisans prefer to sell to buyers who display appreciation for their craft
products and in the case of jewelry, those who will display it aesthetically.
One artisan I spoke to confirmed:
Our necklaces which are brightly colored look good with a white
shirt and usually foreigners know to wear this combination; then
the necklace shines.
And yet another artisan described his preference for discerning buyers:
I want my products to be displayed well in the customer’s home..I
don’t want it[the product] to lie on a dusty shelf somewhere or in
a closed cupboard...some buyers will put my product on a center
table, that’s what i like.
Traders, on the other hand, lacking a sense of psychological ownership in
their job orientation of work, see products merely as a means to monetary
gain, not paying attention to buyers’ appreciation for the product. As one
trader said:
I have to make money...what do you do? you just adjust prices
and keep going..this is business.
Building on discussion that explains how a craftsmanship approach to a calling leads artisans to develop psychological ownership over their products and
a preference for certain kinds of buyers, this section hypothesizes how the
presence or absence of such a strong sense of ownership over products regulates artisans’ and traders’ selling outcomes in this setting. In particular, I
focus on the impact of psychological ownership developed through a calling
orientation on three key outcomes of the selling process: prices, bargaining
intensity and the length of transactions.
These hypotheses derive from my experiences in the field. In order to better
understand the selling behavior of artisans and traders in Channapatna, I
engaged in several transactions purchasing handicraft jewelry, typically along
with local women from the area. Despite looking Indian, I was distinguished
from the local women by the handmade jewelry and handwoven clothing
that I wore, bought from craft clusters around India. Further, even though I
spoke the same language, it was evident that I was visiting from abroad from
the way I spoke. Thus, I was differentiated from the local women along two
18
dimensions, level of discernment, through my appearance signaling a taste for
craft products, and level of willingness-to-pay, by the fact that I was visiting
this isolated town from far away. This difference between me and the local
women manifested in three outcomes that I observed in the selling process,
which guide the hypotheses developed below.
Prices. The first key difference that I noticed was that artisans would often charge me lower prices than they would charge the local women, while
the traders priced in line with more traditional notions of profit maximization – charging me a higher price than they did the locals. The supposition
that artisans provided me with discounts due to the taste I portrayed for
craft products was validated by my observation that on occasion, artisans
offered discounts even to conspicuously wealthier buyers, like foreigners, for
the opportunity to display the products in a foreign land in an aesthetic
manner. My survey also indicates that when it came to pricing decisions,
artisans paid attention not to buyer’s financial backgrounds but rather their
intention of use for the product. When I asked them, “ Why do your prices
vary?”, the most common responses were “depends on the customer’s interest” or“customer’s purpose from the purchase.” On the other hand, when
it came to traders, I was consistently charged higher prices as compared to
the local women. This was consistent with traders’ response to the same
question of “ Why do your prices vary?”, where the most common responses
were “different ability to pay among buyers” or “maximum profits.” These
observations regarding artisans’ and traders’ selling preferences allows for the
development of the following hypotheses:
Hypothesis 1a: Artisans provide discounts to discerning buyers.
Hypothesis 1b: Traders price according to buyers’ willingnessto-pay.
Bargaining Intensity. While price is perhaps the most visible indicator of
the differences between artisans’ and traders’ selling behavior, the nature of
the bargaining process also offers important clues about how work orientation
might affect market outcomes. When I bought products from artisans and
tried to haggle for them, as is common in informal markets like Channapatna,
artisans were often very willing to agree to the price I requested. Overall,
19
the transaction did not appear to be confrontational and artisans were more
interested in making the sale to a discerning buyer, rather than achieving a
particular monetary outcome. The idea is that an artisan who is keen to sell
to a certain customer, not only charges lower prices, but is less interested
in haggling over a monetary outcome. Consistent with this notion, the local
women found artisans to be being quite hesitant in reducing the original
price that they had been quoted. In this case, artisans had a more “take
it or leave it” approach. Traders, as in the case of prices, did not seem to
pay attention to a customers’ appreciation for the craft. Instead, traders
bargained as much as possible, irrespective of whether the local women or
I was making the purchase. Traders seemed to be focused on closing the
sale while at the same time, extracting the highest possible price from each
buyer. These observations motivate the following hypotheses:
Hypothesis 2a: Artisans bargain less with discerning buyers.
Hypothesis 2b: Traders bargain “hard” with all kinds of buyers.
Transaction Length. Finally, sales transactions provide an opportunity
to compare the selling behavior across traders and artisans by measuring not
just the prices that sellers charge, or the intensity with which they bargain
but also the time that they choose to spend with different kinds of buyers.
In my initial fieldwork, I found that artisans differed quite starkly in their
interactions with different kinds of buyers, while traders engaged uniformly
across buyer groups. In particular, there was a significant difference in the
length of transactions between me and the local women in the case of artisans.
While shopping for products, artisans would often notice the handmade jewelry I wore and would ask about their origin: where the products were from
and what materials and processes went into their production. I would also
get asked where I was from and whether I had ever seen handicrafts of this
nature before. Some artisans would further educate me about their painstaking production process. In contrast, when it came to the local women, the
transactions proceeded swiftly, with the conversation being restricted to the
purchase at hand. This pattern, where artisans had longer transactions with
me as compared to the local women, did not seem to replicate itself in the
transactions I had with local traders. They seemed indifferent to whether
the local women or I wore craft jewelry or not, and it was never a topic of
conversation, leading to transaction lengths that were more or less similar.
20
In the spirit of this observation, I hypothesize that:
Hypothesis 3a: Artisans have longer transactions with discerning buyers.
Hypothesis 3b: Traders have equally long transactions with
different buyer types.
Mechanism. Finally, if the mechanism through which work orientation affects market and selling outcomes is psychological ownership, then we expect
artisans with a greater degree of psychological ownership to provide larger
discounts. In particular, Pierce et al. (2003) have argued that an important
feature that moderates levels of psychological ownership is how involved the
creator is with the production process. This is because, the opportunity to
do a whole and identifiable piece of work, from a logical beginning to a logical ending point, provides workers with the opportunity to become familiar
with each of the tasks that are associated with completing a piece of work
(Pierce et al., 2009; Hackman and Oldham, 1980). In addition, it affords the
opportunity to see the sequencing of tasks, to come to understand those connections, and to develop an understanding of how the whole comes together.
The implication is that, the deeper the knowledge of the target obtained
through a living relationship with the object, the more psychological ownership will develop since: “the more information possessed about the target of
ownership, the more things are felt thoroughly and deeply and in the process
[the more] the self becomes attached to the object” (Pierce and Jussila, 2011,
pp 80).
My setting is unique, because every artisan is not involved in all nine steps
of the production process, and in some cases, a few initial or final steps are
delegated to other smaller artisans or family members. I exploit this feature
to test the claim that a greater sense of psychological ownership is developed
when artisans are involved in a larger number of processes, which leads to
greater discounts to discerning buyers. Put simply, in testing the mechanism
of psychological ownership through which a calling work orientation leads to
greater discounts, I hypothesize that:
Hypothesis 1d: Artisans’ discounts to discerning buyers increases with greater involvement in the number of processes they
participate in.
21
A visual depiction of all the hypotheses can be seen in Figure 3.
INSERT FIGURE 3 ABOUT HERE
IMPACT OF WORK ORIENTATION ON SELLING OUTCOMES: A FIELD EXPERIMENT
An audit study design, which has previously been used in the study of discrimination in sociology (Pager (2007), Pager and Quillian (2005), Correll
et al. (2007)), is adapted to study work orientation and its impact on market
outcomes in Channapatna. Specifically, the experiment is designed such that
artisans’ psychological ownership over their products is activated by particular categories of trained buyers who project a more discerning orientation
towards craft products and not by others, allowing me to test hypotheses
about the impact of a calling and job orientation on prices, bargaining intensity and transaction length.
Specifically, the experiment6 proceeded as follows. Six auditors were trained
to be buyers of a standardized craft product, a pair of half-inch bangles,
in Channapatna. Each auditor visited a sample of sellers in a randomly
assigned order to make these purchases. The auditors negotiated for a price,
according to a prescribed bargaining script, and recorded price and other
information on a form after each sale. The experiment, which was conducted
over a two week period in the middle of May 2012, coincided with a large
cricket tournament in the area. This meant that there were more tourists
than usual visiting Channapatna and the auditors for the experiment did
not stand out. This section describes the design and implementation of the
experiment in detail.
Product. The “Channapatna Bangle”, of half-inch width, was the standardized craft product chosen for the purpose of the experiment (See Figure
4 for a picture). This bangle is ubiquitous and widely produced and sold in
Channapatna owing to its current popularity in Indian fashion. In addition,
6
A big thank you to Tavneet Suri for all her help with the experiment. Schoar and Iyer
(2013) was also instructive in the design of the audit study.
22
this bangle is standardized in its cost of production and yet, offers an avenue
for creative expression and craftsmanship through differential color, pattern,
and design. Since these bangles are usually worn in pairs, each auditor also
purchased a pair of Channapatna Bangles of half inch width.
INSERT FIGURE 4 ABOUT HERE
Sellers. For this experiment, a sample of 77 sellers, 52 artisans and 25
traders, was created from Channapatna’s population of over 5,000 sellers.7
See Figure 5 for a GPS plot of the chosen artisans and traders. In choosing
the sellers for the experiment, only those artisans and traders who had ample
experience making and selling half-inch bangles, and who had sufficient stock
of this product were considered. Further restrictions were imposed on the
sample to select artisans and traders who were at least 500 meters away
from other sellers in the sample. The final sample consisted of sellers across
8 localities of Channapatna. The sellers in the sample were divided into 20
groups, each consisting of 3 to 4 artisans or traders, based on geographical
proximity. This aided in devising a schedule for the experiment.
INSERT FIGURE 5 ABOUT HERE
Auditors and Treatment. Six auditors were hired for this experiment,
four Indians and two foreigners. The auditors were all women in their early
twenties with 12 to 14 years of education. They came from families of 4 to 6
members and had 2 to 3 siblings each. They also looked alike, with similar
height and weight. None of them had been to Channapatna before, or had
prior familiarity with the craft work there.
The six auditors were similar except for their “look,” or material presentation,
which constituted the key aspect of the treatment for the experiment. My
fieldwork indicated that artisans preferred clients who were appreciative of
their products, especially if they had traveled from a foreign country or if they
were discerning Indian appraisers of the craft. Accordingly, the auditors were
7
My participant observation and interviews encompassed a wider sample of artisans
and traders, which allowed me to establish that the sellers in my sample seem similar to
other sellers in Channapatna.
23
assigned to three experimental roles, “International” foreign auditors who
conveyed a high level of appreciation (apart from having a high willingnessto-pay), “Indian-Craft,” Indian auditors wearing several handmade products
thereby conveying taste for craft work and ”Indian-Baseline,” a control group
that consisted of Indian buyers who dressed like the locals in the area.
In order to enact these roles, I hired four Indian auditors (who were randomly assigned to the Indian experimental categories) and two international
auditors. The Indian auditors I hired were all from small towns about 450
kilometers away from Channapatna in the same state of Karnataka and spoke
the same language - Kannada- as the locals in Channapatna. Although they
conducted their transactions in Kannada, they were outsiders to Channapatna, which was evident from the accent with which they spoke the language.
They dressed traditionally in the Indian attire of salwar-kameez, a pair of
loose trousers, a long tunic and a scarf, just like the average female Indian
tourist in Channapatna. However, the two auditors in “Indian-Craft” were
directed to display an aesthetic taste for handmade, craft products in their
fashion choices instead of the more common synthetic alternatives. Hence,
they wore several craft items including handmade terracotta earrings, a handcrafted metal necklace, salwar-kameezes made from handwoven cotton and
they each carried handbags woven out of natural fiber. These products were
specifically from craft clusters in other parts of India, not from Channapatna, and were meant to indicate appreciation for craft work rather than
familiarity with Channapatna’s products. On the other hand, the two auditors in “Indian-Baseline” dressed like they normally would, with plastic
jewelry, salwar-kameezes made of polyester material and they carried synthetic handbags.
I also hired two international auditors for this experiment who were assigned to the “International” role. These auditors were from Thailand and
Mauritius, spoke neither Kannada nor Hindi, and therefore conducted their
transactions in English.They looked discernibly foreign, with their lighter
skin color, distinct features and their Western clothing consisting of dresses,
skirts, pants and shorts, and as such, were similar to the average international
tourist shopping in Channapatna.
The six auditors were each paid Rs.10,000($200) for this assignment lasting
two weeks. This is equivalent to the wage for an entry-level job at a call
center in India.
24
Training. Prior to implementing the experiment, the auditors spent three
days in training, consisting of classroom presentations and discussion, practical observation of the area, followed by a pilot exercise. The first part of
the training involved introducing the auditors to the setup of the experiment
without revealing the research questions of interest. This included educating the auditors about the wood and lacquerware products of Channapatna
and specifically, the product that they would purchase in the experimenta pair of bangles of half inch width. This would ensure that the auditors
could easily identify the Channapatna bangle at the time of sale. Auditors
were instructed to transact with the trader or artisan himself, not a relative
or wife, and similarly, not to purchase from sellers not listed in the sample.
Subsequently, the auditors were put through a range of role-playing exercises
to practice acting like a buyer and to achieve consistency in their acting.
This portion of the training involved memorizing a script describing what
the auditor was doing in Channapatna, namely making a stop en route to
the tourist city of Mysore, learning to deny any prior exposure to the wood
and lacquer craft and learning the bargaining routine to haggle for the products. The final element of the classroom training entailed practicing how to
fill out a “Transaction Form”, a custom form designed to capture prices and
other details of the transaction, after each purchase.
The classroom education was followed by field training in Channapatna.
Here, a mini-van was rented to drive through Channapatna and build familiarity with the area. Auditors were given detailed maps marking the
locations of every artisan and trader in the sample and were shown the different localities of the town so that they could find their way alone during
the actual experiment. Finally, a pilot experiment was conducted in a nearby
town called Yarabnagar that makes carved wooden products. Here, auditors
visited a small sample of sellers to rehearse their script, make purchases in accordance with the bargaining protocol and practice filling out the transaction
form after each sale.
Randomization. The schedule for the experiment, governing the transactions that an auditor would conduct on a given day, was created using
randomization code. Each day of the experiment was divided into two time
slots, a morning slot and an evening slot. As established, the actors for the
experiment comprised 6 auditors and 20 seller groups, each consisting of 3
25
to 4 sellers each. The goal of the randomization code was to assign one auditor and one group of sellers to each time slot such that: 1) each auditor
visits a given seller group only once, 2) two auditors do not visit the same
seller group in the same time-slot, 3) sellers do not receive auditor visits on
consecutive days and 4) a seller does not receive more than 3 auditor visits
in a week.8 Imposing these constraints on the randomization code mitigated
concerns of “demand effects” or stockouts9 and ensured that sellers in the
sample were not bombarded by auditors.
Buying Process. On any given day of the experiment, each auditor was
given her schedule for the day and money for the transactions. The auditors
would set out at 9AM and commute within Channapatna independently by
rickshaw or bus. On reaching an assigned seller, the auditor would leisurely
survey the seller’s products before choosing a pair of half-inch bangles for
purchase. The auditor would then get the seller’s attention and ask the price
of the bangles. Upon hearing the seller’s initial price, in the first round of
bargaining, the auditor would offer half of this quoted price. If the seller did
not accept this offer, he would suggest a second price to which the auditor
would raise her initial price by Rs.2 in this second round of bargaining. If
the seller did not accept this offer as well, the interaction would repeat with
the seller offering yet another price and the auditor raising her price by Rs.2
again in the third round of bargaining. The bargaining would cease at this
point and the auditor would pay the final price demanded by the seller. This
bargaining routine, modeled on typical informal market behavior in India
(Schoar and Iyer, 2013), was standardized across all transactions conducted
in the experiment. After completing a transaction, the auditor would leave
the seller’s premises and find an isolated spot to fill out the transaction form
before proceeding to the next seller. If a transaction could not be performed
due to unavailability of the seller, the auditor took note of this and revisited
the seller on a different day.
At the end of the day, auditors would submit their purchased bangles and
completed transaction forms to me. Each pair of bangles was labeled with
8
Survey data indicate that sellers retail 70 bangles per week on average and therefore,
the 3 auditor purchases per week of the experiment is unlikely to be noticed by the sellers
or affect their behavior.
9
A situation where the sellers price differently because of depleting stock.
26
both seller and auditor information. The forms were also checked for missing
values and data entry was completed the very same day.
RESULTS
In total, the experiment comprised 455 audit visits to 52 artisans and 25
traders conducted by 6 auditors. Table 2 shows the distribution of sales
transactions by each seller and buyer category. The table reports that each of
the three auditor categories conducted between 100 and 103 transactions with
artisans and 50 transactions with traders over the course of the experiment,
thus making for a fairly balanced overall distribution in exposure to the
experimental treatment, namely the 3 “looks”.10 Data from the experiment
also confirm that the ordering of auditor visits to any seller was random,
as planned. For example, a seller had a roughly 33% chance of receiving
an International, a 31% chance of receiving an Indian-Baseline and a 35%
chance of receiving an Indian-Craft auditor for their first transaction. In
unreported analyses, I also verified that the mean prices offered by sellers
on any given day of the experiment displayed no discernible trend over time.
To be cautious however, all reported regressions include date fixed effects
allowing me to control for any possible time trends in the results.
INSERT TABLE 2 ABOUT HERE
To confirm that randomization was conducted correctly in the experiment,
Table 3 displays an OLS regression of the auditor categories on 3 baseline
transaction-level characteristics that could have an impact on price. We
would not expect any significant heterogeneity across auditor categories in
these baseline measurements if the randomization was done correctly, since
treatment assignment was random and orthogonal to these baseline characteristics. The first characteristic that the auditors took note of was whether
there was electricity at the time of sale. This is relevant because Channapatna faces unpredictable power outages of 3 to 4 hours a day. Second, the
10
While all 150 transactions with traders were conducted as planned, there were 7
planned transactions with artisans that could not be completed due to unavailability of
the artisans in question. However, these incomplete transactions are also distributed evenly
across the 3 auditor categories.
27
auditors estimated the remaining stock of half inch bangles a seller had, after
they had made their purchase; this stock varied widely based on the seller’s
day-to-day business. And third, the auditors indicated whether the seller’s
spouse was present while the transaction was being conducted; the spouse
was typically present when there were other errands to complete such as
cleaning or arranging the items on display. The table reports that electricity
was available in about 58% of the 455 transactions, that a seller typically
had between 12 and 17 pieces of half-inch bangles left and the seller’s spouse
was present during 22% of the transactions. However, as predicted, these
baseline transaction-level characteristics do not vary significantly across the
auditor categories, providing evidence that randomization was implemented
according to plan.
INSERT TABLE 3 ABOUT HERE
Prices. This section first explores the variation in initial prices offered by
artisans and traders to the auditors displaying different looks. Initial price
is the price first quoted by the seller. Initial price is a particularly useful
measure because, even though the bargaining protocol was standardized,
initial prices reflect the sellers’ appraisal of each buyer role and should be
independent of the way in which bargaining proceeded.11
Figure 6 illustrates the distribution of initial prices (in Indian Rupees, where
approximately Rs.50=$1) that auditors received when transacting with artisans and traders. The graph to the left shows that the mean initial price
offered by artisans is Rs.27.91, but that there is significant variation in this
price: it ranges from Rs.0 to Rs.60 and its standard deviation is 14.79. The
graph to the right illustrates the corresponding initial prices that auditors
received from traders. The mean initial price offered by traders is considerably higher than that of artisans at Rs.36.35. Traders’ initial prices also
vary widely, ranging from Rs.18 to Rs.75 with a standard deviation of 10.88.
Note that, unlike artisans, traders do not offer any zero initial prices.
11
The focus of the analyses will mostly be on initial prices, but the results are robust
to using final prices also. Final price is the price at which the product is eventually
purchased after auditors engage in three rounds of standardized bargaining. On average,
the buyers receive about a 15% price reduction after bargaining with artisans and a 10%
price reduction from traders.
28
INSERT FIGURE 6 ABOUT HERE
In order to investigate whether average prices differ significantly between
auditor groups, for both artisans and traders, Figure 7 plots the mean initial price offered to the three auditor groups, with error bars representing a
95% confidence interval around the mean. Consistent with the predictions
of Hypothesis 1a and 1b, the figure indicates that artisans charge the lowest
mean prices to Indian-Craft (Rs.18.63) followed by International (Rs.28.15)
and Indian-Baseline (Rs.36.87). Artisans seem to distinguish between these
three groups and charge them prices in accordance with their displayed taste
and appreciation for handmade products. It is interesting to note that the
discounts offered by artisans are greater for Indian-Craft as compared to the
International auditors. This suggests, perhaps, that artisans are most responsive to the customers who not only signal an appreciation for craft (like the
international tourists), but who demonstrate a physical and monetary commitment to handicraft products by purchasing and wearing them. Traders,
on the other hand, price quite differently. They charge the highest mean
price (Rs.45.30) to the International category, which is in accordance with
pricing based on customers’ willingness-to-pay. There seems to be no significant difference in the traders’ prices offered to Indian-Craft (Rs.32.72) and
Indian-Baseline (Rs.31.04), suggesting that traders disregard the handicraft
products worn by the Indian-Craft category in making pricing decisions. In
this way, traders seem to price in accordance with customers’ willingness-topay for the products being sold rather than appreciation for the craft.
INSERT FIGURE 7 ABOUT HERE
Having explored the variation in prices offered to different buyer groups, Table 4 tests whether log initial and final prices (excluding zero prices) offered
to different auditor groups are statistically different from each other. The
OLS models I employ also allow me to account for error structures robust to
group-level covariance,12 add date and time-level fixed effects and log specifications allow me to interpret differences in percent-terms. Specifically, I
12
Standard errors are clustered at the level of sellers (77 clusters); this allows for potential correlation in the error terms within sellers and uses repeated observations on
transactions with the same seller to estimate standard errors robust to this problem (Angrist and Pischke, 2008). Standard errors are clustered in a similar way for all the models
reported in this study.
29
regress price outcomes on three dummy variables, one for each buyer category, Indian-Baseline, Indian-Craft and International, using separate models
for artisans and traders, focusing on the variation within sellers in prices
offered to different buyer categories. Column (1) of the table regresses initial
price on Indian-Craft and International, using Indian-Baseline as the omitted category. The constant term gives us the estimated mean initial price of
the omitted category, Indian-Baseline, conditional on covariates, while the
coefficients on the Indian-Craft and International dummy variables provide
estimates of the difference in mean prices between Indian-Baseline and the
respective category. The table reports that artisans offer a 50% discount to
Indian-Craft and a 27% discount to International. A post-estimation F-test
is performed to test the equality of the Indian-Craft and International coefficients, which shows that the difference in these coefficients for artisans is
also statistically significant. This regression is then repeated in column (2)
for traders. The table reports that traders charge almost the same price to
Indian-Craft as they charge to Indian-Baseline, but charge 45% higher prices
to International as compared to Indian-Baseline. The post-estimation F-test
indicates that the difference in prices between Indian-Craft and International
is also statistically significant. Columns (3) and (4) repeat these regression
for final prices and find the same pattern in price discrimination for both
artisans and traders, confirming that the pricing behavior is resistant to bargaining. Overall, the regressions provide evidence to support Hypotheses 1a
and 1b that artisans offer discounts to those groups of buyers who display a
taste for handicraft products in a way that traders, who focus on the buyers’
willingness-to-pay, do not.13
INSERT TABLE 4 ABOUT HERE
It is further remarkable in my setting, however, that in some cases artisans
will offer bangles at a zero price to some auditors, even before they have
bargained for it. Artisans seem so eager to sell to a particular buyer that
they are willing to part with their product without any financial returns,
serving perhaps as the strongest confirmation of my theory. Table 5 explores
patterns in the zero prices offered by artisans to test whether there are signif13
The results are robust to using raw prices, dropping fixed effects and including zero
prices, indicating that the results are not likely to be driven by differences in transactionlevel characteristics, but by the role played by the auditor herself.
30
icant differences across the 3 auditor categories. This is important because
more than 10% of initial prices quoted and 12% of final sale prices were zero
for artisans.14 To test whether these zero prices differ across the auditor
categories, I created dummy variables for both initial and final price indicating whether a given price is equal to 0. Table 5 reports the OLS regression
on zero prices offered by artisans using a specification similar to Table 4.
Column (1) shows that Indian-Craft are 18% more likely to receive a zero
initial price than Indian-Baseline, and International auditors are 7% more
likely to receive a zero initial price than Indian-Baseline. In addition, a postestimation F-test rules out equality of the coefficients of Indian-Craft and
International. Column (2) further shows that the results are even stronger
for a zero final price. This demonstrates that the broader price discrimination pattern observed amongst artisans, namely offering the lowest prices to
Indian-Craft and the next lowest prices to International, also holds for zero
prices, with Indian-Craft having the highest likelihood of being offered a zero
price followed by the International category.
INSERT TABLE 5 ABOUT HERE
Bargaining Rounds and Transaction Length. As predicted in Hypothesis 2a, if it is indeed true that artisans respond differently to the presence
of more appreciative customers as a result of their strong identification with
work, they can also be expected to haggle less with such clients. I collected
detailed data on not only the prices charged, but also the number of bargaining rounds that took place before the transaction was completed. Table
6 compares the total number of bargaining rounds required to complete a
purchase (where 0 is the minimum and 3 is the maximum) across auditor
groups using an OLS model. Column (1) finds that artisans engage in fewer
bargaining rounds with both International auditors (2.05 rounds) and IndianCraft auditors (2.05 rounds) as compared to Indian-Baseline auditors (2.67
rounds). Column (2) shows that traders typically bargain more than artisans, but do not seem to bargain differently with different auditor groups in
any way i.e. they bargain “hard” with all buyers. This provides support for
hypotheses 2a and 2b.
14
Note that there are more zero final prices than zero initial prices, implying that not
all zero prices are prior to bargaining.
31
INSERT TABLE 6 ABOUT HERE
In order to investigate hypotheses 3a and 3b that measure the impact of work
orientation on transaction length, I use data collected by the auditors who
were trained to use a stopwatch to measure the time taken for each transaction to complete. Columns (3) and (4) of Table 6 report results from an
OLS regression that regresses transaction length on each auditor category.
Column (3) shows that even though artisans bargain significantly less with
Indian-Craft and International, as compared to Indian-Baseline, they engage
in longer transactions with these two groups of discerning buyers. Since
auditors were rigorously trained to use a standardized script in conducting
their transactions, differences in transaction length stemmed solely from variation in seller-initiated conversations for different auditor groups. Anecdotal
descriptions confirmed that artisans asked Indian-Craft auditors questions
about the handmade products they wore as part of the experimental treatment and asked International auditors questions about their home country.
This resulted in artisans having longer transactions with Indian-Craft and
International auditors, in an attempt to get to know the discerning buyers
who were taking home their “babies.” The estimates reported in column (4)
show that traders display no difference in transaction lengths between the
different auditor categories, confirming that traders only care about buyers’
willingness-to-pay. These results confirm hypotheses 3a and 3b.
Mechanism. Hypothesis 4 predicts that as artisans engage in a greater
number of work processes, their craftsmanship orientation will lead them to
have more psychological ownership and give greater discounts to discerning
buyers. In order to investigate such an effect, I use survey data that measures
artisans’ involvement in each of the the nine different stages that comprise
the overall production process.15 I find that on average artisans engage in
about 6.4 work processes with a standard deviation of 2.25.
Figure 8 graphs the impact of involvement in work processes using estimates
from an OLS model. The underlying model regresses the initial price offered
on dummy variables for auditor categories, as before, and also includes Processes as an independent variable. Processes is a continuous variable ranging
15
These processes include cutting the wood, seasoning the wood, turning the wood on
a lathe, assembling the products, polishing, lacquering, painting, finishing and selling.
32
from 1-9 measuring the number of work processes that a given artisan engages in. Crucially, in addition to these main effects, the regression includes
interactions between auditor category and Processes. This interaction term
estimates how prices offered change for different buyer groups as an artisan
engages in a greater number of work processes. These estimates can then
be used to calculate the predicted price than an auditor will receive from
an artisan depending on the auditor’s category and the artisan’s Processes.
A convenient way of displaying these predictions obtained from regression
coefficients is using a “marginal plot,” as shown in Figure 8.
INSERT FIGURE 8 ABOUT HERE
Figure 8 makes clear that the difference in prices offered to the three buyer
groups increases with greater work process involvement. For example, while
artisans who are engaged in only one work process are seen to provide a
discount of about 40.5% to Indian-Craft auditors as compared to IndianBaseline auditors, this discount increases to 53% for artisans engaged in all
nine work processes. This finding is in accordance with the theory that as
artisans engage in more work processes, they have more psychological ownership over their products, and are therefore willing to give greater discounts
to transact with discerning customers. This confirms Hypothesis 4 that psychological ownership seems to be an important mechanism for the artisans’
pricing pattern described in this study.
Appendix A describes results from a number of robustness exercises performed to investigate the role of alternative explanations in explaining artisans’ distinctive pricing behavior. These include age, work tenure, presence
of neighboring sellers, income, distance from highway, business with traders,
visits to Bangalore, education and religion of artisans.
DISCUSSION
This paper presents an in-depth examination of artisans and traders in a
handicraft cluster in India to illustrate the significant impact of their different
work orientations. While scholars have long described the differences between
a job versus calling orientation towards work (Bellah et al., 1985; Wrzesniewski et al., 1997) and have shown that a calling orientation is associated
33
with distinct work related attitudes and behaviors (Bunderson and Thompson, 2009; Dobrow, 2006; Wrzesniewski et al., 1997), this paper presents
causal evidence that work orientation significantly impacts economic outcomes. In particular, the paper empirically establishes this causal claim by
collecting data on objective variables, using a field-experimental design to
rule out alternative explanations and by presenting a counterfactual analysis
through the study of two otherwise similar occupations that differ chiefly in
their orientation towards work. Additionally, the paper uncovers the mechanism of psychological ownership that helps us link a sense of calling developed
through a craftsmanship orientation with economic outcomes.
Data from participant observation, interviews and a survey is used to characterize the lives and work practices of artisans, who see their handicraft work
as a calling, and traders, who retail craft products as a job. Artisans are
shown to have a calling motivated by a craftsmanship orientation, which results in a unique relationship of psychological ownership with the handicraft
products they make, characterized by personal sacrifices, intimate knowledge of the products and a desire for control over the work(Pratt et al., 2013;
Pierce et al., 2003). Traders, in contrast, are shown to value products only for
the profits that they bring. These differing relationships with the products
engender different preferences over buyers to sell to: artisans prefer selling to
discerning customers whereas traders care solely about buyers’ willingnessto-pay. Building on this theory, hypotheses are developed, which describe the
impact of work orientation on selling outcomes including prices charged, bargaining intensity and transaction length. A field experiment, where trained
buyers, varying in the taste that they display for craft work, are sent to purchase identical products is then used to compare the differences in traders’
and artisans’ selling behavior. The results validate the hypotheses: artisans
provide significant discounts (up to 50%), bargain with lower intensity and
engage in longer transactions with discerning customers while traders charge
wealthier customers higher prices and do not differ along other selling outcomes. Broadly, the qualitative data and the results of the field audit study
paint a picture supporting the initial claim that work orientations have a
significant impact on economic decisions of workers.
Although the focus of this paper is on selling outcomes, one could reasonably
expect that having that a craftsmanship-motivated calling influences other,
more complex market outcomes too. This study offers a theoretical and empirical framework to understand these other outcomes as well. For example,
34
musicians often have to make decisions regarding where to perform. While
it would seem advantageous to pick large concert halls that would generate
more revenue from ticket sales, one can imagine that musicians who have psychological ownership over their carefully-prepared concerts also consider the
likely quality of the audience- in particular, the ability to appreciate nuances
in the compositions- in picking performance venues (Smith, 2009; FonsecaWollheim, 2012). Similarly, workers often also have to make investment and
financing choices, where again a close association with one’s output can influence the decision made. For instance, filmmakers, in choosing a production
company for their film, are likely to consider which companies will preserve
the artistic vision of their painstakingly-crafted films, and not just regard
the monetary rents from this contract (Lovell, 2012). Further, a wide range
of workers additionally have to choose what intellectual property (IP) or licensing scheme they would like to use to protect their work (Murray, 2010).
In these decisions too, it is reasonable to expect that work orientation plays
a role in the choice of IP regime: Silbey (2014) reports that recouping investment through IP arose infrequently in interviews with workers, in contrast
to abundant discussion about the value and meaning of their work.
Methodologically, this paper makes several contributions. First, a randomized field experiment, which is a common tool in the study of discrimination
in sociology and in development economics, is used to precisely measure the
impact of different buyer groups on prices and selling outcomes, while controlling for other factors that are not under study. Second, the paper shows
how conditions common in developing country contexts (like informal price
setting or the prevalence of craft communities) can be exploited to illuminate general theoretical questions of interest in meaning of work. Third,
this study demonstrates how one might combine field experimental evidence,
which provides a causal but narrow outcome measure, with rich ethnographic
analysis to ground the phenomenon and investigate mechanisms.
Finally, this research informs the design of labor-market institutions in developing economies by highlighting the need for more sophisticated models
of how low-income workers make sense of their work, beyond theories rooted
solely in financial interests. Some scholarship in the meaning of work literature has argued that the tradeoff between meaning and money is not
relevant to workers facing poverty, for whom the economic value of work becomes more salient (Leana et al., 2012; Brief and Nord, 1990). These scholars
have argued that poverty is a classic “strong situation” which can constrain
35
the meanings to be found in work practices such that individuals suffering
economic distress tend to deemphasize the latent value of work (i.e. selffulfillment) in favor of the manifest value of work (e.g., monetary rewards)
(Leana et al., 2012). However, artisans in Channapatna, despite being extremely poor, have significant psychological ownership over their handicraft
products which motivates them to make monetary sacrifices for the future
of their products. This suggests that an understanding of work that solely
emphasizes its instrumental benefits is insufficient to design labor market
institutions and human resource policies among the working poor.
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40
1
Figures and Tables
Figure 1: Channapatna on Bangalore-Mysore Highway
41
42
Figure 2: A Diagram illustrating the Production Process
43
Figure 3: Summary of Hypotheses of Impact of Work Orientation on Selling Outcomes
Figure 4: Some Channapatna Bangles at an Artisan’s Home
44
45
Figure 5: GPS Plot of Artisans and Traders in Sample
Figure 6: Distribution of Initial Price(in Rupees) for Artisans
1
Histogram of Traders' Initial Prices
.6
.4
.8
Cumulative Density (Initial Price)
.04
Density
.02
0
20
40
Initial Price
0
0
0
.2
.2
.02
Density
.04
.06
.4
.6
.8
Cumulative Density (Initial Price)
.06
1
.08
Histogram of Artisans' Initial Prices
60
20
40
Initial Price
Initial Price: price first quoted by seller
Exchange Rate: Rs.50=$1
45.30
36.87
31.04
32.72
28.15
18.63
10
Mean Initial Price
20
30
40
50
Figure 7: Mean Initial Price(in Rupees)
Artisans
Traders
Sellers
Indian-Baseline
Indian-Craft
Initial price: price first quoted by seller
Error bars represent a 95% confidence interval around the mean
Exchange Rate: Rs.50=$1
46
International
60
80
53% Discount
40% Discount
20
Linear Prediction of Initial Prices
25
30
35
40
Figure 8: Predicted Impact of Work Process Involvement on Initial Prices
0
1
2
3
4
5
6
7
8
Work Process Involvement
9
10
Indian-Baseline
Indian-Craft
International
Error bars represent 95% confidence intervals
Note:The entire work process can be split into 9 steps, some of which can be
subcontracted. Processes is a continuous variable ranging from 1-9 measuring the
number of work processes an artisan engages in. The graph captures how artisans’
prices change differentially for each category of buyers as they are involved in more
work processes. Estimates are reported from a regression with Initial Price as
the dependent variable and Buyer Group dummies and Processes as independent
variables, including both main effects and interactions between buyer groups and
processes. Each data point represents the predicted initial price at a given level
of (buyer group, process level). For example, the predicted initial price for buyer
group International for artisans engaging in 4 work processes is 27.48.
47
Table 1: Comparision of Seller Characteristics
Artisan Trader
Difference
Fraction Male
Age
Number of Family Members
Fraction Married
Fraction Muslim
Fraction Backward Castes
Years of Education Completed
Fraction Literate
Work Tenure (years)
Fraction in Cooperatives
Exhibitions Attended/year
Visits to Bangalore/month
Radio Listening Hours/day
Income in Dollars
0.923
(0.269)
42.65
(9.903)
6.423
(4.421)
0.942
(0.235)
0.769
(0.425)
0.885
(0.323)
6.788
(3.472)
0.885
(0.323)
23.71
(10.13)
0.288
(0.457)
1.292
(1.732)
3.241
(2.325)
4.667
(2.371)
77.39
(50.18)
1
(0)
46
(9.582)
5.826
(2.146)
1
(0)
0.130
(0.344)
0.826
(0.388)
10
(3.516)
0.957
(0.209)
19.32
(17.54)
0.261
(0.449)
2.200
(1.095)
2.450
(1.538)
3.200
(3.676)
155.2
(85.53)
49
21
Observations
-0.077
-3.346
0.597
-0.058
0.639∗∗∗
0.059
-3.212∗∗∗
-0.072
4.396
0.028
-0.908
0.791
1.467
-77.850∗∗∗
mean coefficients; sd in parentheses
* p<0.1, ** p<0.05, *** p<0.01
Source: Survey conducted in June 2012 with sellers in experimental sample;
100% response rate for artisans and 96% response rate for traders;
one trader refused the survey and one trader owns two shops in the sample
48
Table 2: Number of Sales Transactions by Sellers and Buyers
SELLERS
BUYERS
Artisans (n=52) Traders (n=25)
Total
Indian-Baseline (n=2)
Indian-Craft (n=2)
International (n=2)
Total
103
102
100
305
50
50
50
150
153
152
150
455
Experimental Design:
6 buyers were hired to purchase bangles from a sample of artisans and traders;
Buyers visited the 2 types of sellers in a randomly assigned order;
The buyers represented 3 experimental categories:
Foreigners, Indians wearing handmade craft products and Indians dressed as usual
Table 3: OLS Balance Checks on Experimental Transactions
(1)
(2)
(3)
Availability of Electricity Stock Left Presence of Seller’s Spouse
Indian-Craft
-0.095
(0.056)
3.865
(2.502)
0.119∗
(0.048)
International
-0.034
(0.057)
3.742
(2.510)
0.063
(0.048)
Constant
0.627∗∗∗
(0.040)
12.438∗∗∗
(1.766)
0.163∗∗∗
(0.034)
455
455
455
Observations
Indian-Baseline is the omitted category
Standard errors in parentheses
* p<0.1, ** p<0.05, *** p<0.01
Note: Auditors collected data on these baseline characteristics after every transaction;
Availability of Electricity: Dummy variable indicating if there was electricity at time of sale
(Channapatna faces power outtages of 3-4 hours a day);
Stock Left: Estimate of number of bangles left with seller after sale;
Presence of Seller’s Spouse: Dummy variable indicating if spouse was present during sale
49
Table 4: OLS Regression on Log Prices
(1)
(2)
(3)
Artisans-Initial Traders-Initial Artisans-Final
(4)
Traders-Final
[D2]Indian-Craft
-0.508∗∗∗
(0.048)
0.113∗
(0.052)
-0.558∗∗∗
(0.061)
0.049
(0.058)
[D3]International
-0.274∗∗∗
(0.051)
0.451∗∗∗
(0.074)
-0.325∗∗∗
(0.057)
0.401∗∗∗
(0.067)
Constant
3.733∗∗∗
(0.069)
3.157∗∗∗
(0.124)
3.569∗∗∗
(0.079)
3.057∗∗∗
(0.113)
Date FE
Yes
Yes
Yes
Yes
Time of Day FE
Yes
Yes
Yes
Yes
275
18.054
0.000
150
34.728
0.000
268
10.795
0.002
150
43.924
0.000
Observations
F-test [D2]=[D3]
p-value
[D1]Indian-Baseline is the omitted category
Standard errors clustered by seller are in parentheses
Zero prices have been dropped in this table to calculate log prices
Zero prices represent 10% of artisans’ initial prices and 12% of artisans’ final prices
Results are robust to raw prices (in Rupees), exclusion of fixed effects and inclusion of zero prices
* p<0.1, ** p<0.05, *** p<0.01
50
Table 5: OLS Regression on Likelihood of Zero Prices offered by Artisans
(1)
(2)
Zero Initial Price
Zero Final Price
[D2]Indian-Craft
0.180∗∗∗
(0.044)
0.237∗∗∗
(0.051)
[D3]International
0.068∗
(0.037)
0.091∗∗
(0.038)
Constant
-0.034
(0.055)
-0.067
(0.055)
Date FE
Yes
Yes
Time of Day FE
Yes
Yes
305
4.722
0.034
305
8.788
0.005
Observations
F-test [D2]=[D3]
p-value
[D1]Indian-Baseline is the omitted category
Standard errors clustered by seller in parentheses
Results are robust to exclusion of fixed effects
* p<0.1, ** p<0.05, *** p<0.01
Zero Initial Price: Dummy variable indicating if initial price=0
Zero Final Price: Dummy variable indicating if final price=0
10% of initial prices quoted by artisans and 12% of final sale prices were zero
51
Table 6: OLS Regression on Bargaining Rounds and Transaction Length
(1)
(2)
(3)
(4)
Artisan-Rounds Trader-Rounds Artisan-Length Trader-Length
[D2]Indian-Craft
-0.621∗∗∗
(0.129)
-0.120
(0.078)
4.014∗∗∗
(1.149)
0.800
(1.244)
[D3]International
-0.280∗∗
(0.120)
0.020
(0.035)
2.402∗∗∗
(0.798)
0.100
(0.629)
Constant
2.670∗∗∗
(0.088)
2.940∗∗∗
(0.033)
7.398∗∗∗
(0.568)
7.860∗∗∗
(0.306)
305
5.184
0.027
150
3.086
0.092
305
1.081
0.303
150
0.385
0.541
Observations
F-test [D2]=[D3]
p-value
[D1]Indian-Baseline is the omitted category
Standard errors clustered by seller in parentheses
* p<0.1, ** p<0.05, *** p<0.01
Bargaining Rounds: Number of rounds of bargaining on price; ranges from 0 to 3
Transaction Length:Time taken for sale in minutes
52
Appendix A : Robustness Checks
This section describes results from a number of robustness exercises performed to investigate the role of alternative explanations in explaining artisans’ distinctive pricing behavior.
First, the field experimental setting is able to rule out the competing alternative explanation of reputational incentives, that artisans give discounts in the
short-run for lucrative gains from an enhanced reputation in the long-run.
Artisans in Channapatna produce and sell in anonymity, lack branding (do
not sign their products) and given the isolation of the town, engage in onetime transactions with tourists devoid of reputational concerns (over 90% of
artisans reported never selling twice to the same direct customer).
In many settings, one might suggest that pricing behavior is driven by pervasive socialization of actors in an occupational community. How artisans
price to different customers might be driven by values and practices that they
are exposed to during their apprenticeship, which they gradually habituate
through increased contact with their peers in the local community. If this
process was important in my setting, we would expect to see that older and
more experienced artisans would have a greater degree of socialization, offering greater discounts to Indian-Craft and International auditors. However,
this prediction does not hold true in the data (Figure A.1 and A.2).
While socialization does not seem to be an important determinant of pricing
behavior in this case, a similar but distinct alternative explanation could be
that artisans’ pricing behavior is driven by community norms around pricing,
where sanctions are imposed if visitors from far away or people that display a
taste for craft products are charged high prices. The idea here is that, while
an individual artisan might not be willing to offer a discount, he is forced to
do so because of peer pressure from other artisans in the vicinity who might
be monitoring his behavior. While the paper has qualitatively established
that artisans in Channapatna operate in relative isolation and are unable to
observe each other’s dealings, a formal test for this idea can be performed
using precise locational data obtained from a handheld geopositioning (GPS)
device. This device enabled not only the collection of the exact latitudinal
and longitudinal position for each artisan and trader, but also the calculation
of the number of other sellers living with a certain radius of the business.
Figure A.3 reports the mean prices offered by two groups of artisans, distin53
guished by the extent of other sellers present in their vicinity. The results
indicate that artisans who live in a “sparse” surrounding (with less that 12
artisans in a 0.2 mile radius and thus, are less likely to observed) do not
price significantly differently than artisans who live in a more densely packed
neighborhood (with relatively greater probability of being observed during
transactions), suggesting that community sanctions do not seem to be an
important factor as far as pricing decisions of artisans are considered.
The GPS data also facilitated the investigation of the alternative explanation
that artisans’ pricing behavior is driven by their level of market exposure. If
artisans do not have enough exposure to different types of customers, then
we do not expect them to price “optimally” in a narrow financial sense, like
the traders. This can be tested in two ways. First, artisans who live close to
the highway (and therefore have relatively more exposure to tourists) should
offer smaller or no discounts to discerning buyers as compared to artisans
who live in interior regions. Second, artisans who transact with traders on
a regular basis should be expected to offer lower discounts because they
have a better sense of traders’ “optimal” pricing structures. However, the
data seem to reject both of these predictions. Group means as indicated
in Figures A.4 and A.5 suggest that artisans’ distance from the highway
or whether they transact with traders does not seem to affect the size of
discounts offered to Indian-Craft and International auditors. This finding
provides some evidence that a lack of market exposure does not seem to be
driving the pricing behavior in this setting.
Another alternative explanation that could account for the results is based on
notions of artisans’ naivete or their fascination with customers from high status groups. Here, the idea is that artisans become so enamored with international tourists or customers wearing craft products that they find themselves
offering discounts that they would not give to other customers. In the survey
that I conducted, one question asked artisans about the frequency of their
visits to nearby cities, especially Bangalore because it is the capital of the
state of Karnataka where Channapatna is situated, it is not too far away and
because it is a prominent shopping destination both for international tourists
and affluent, art-loving Indian customers. Insofar as Bangalore provides sellers exposure to high status customers and foreign tourists, one would expect
that artisans who visit Bangalore have a lower degree of fascination towards
International or Indian-Craft auditors. However, Figure A.6 demonstrates
that this prediction is not true in the data, suggesting that fascination with
54
high status customers or artisans’ naivete does not seem to be an important
driver of the main results.
Finally, while it seems unlikely, it is possible that international customers
or those wearing craft jewelry might have relatively greater experience shopping for craft items in India and are therefore more conversant with the prices
that are typically charged for such products, while other Indian customers
are unaware of such details. This explanation predicts that artisans, knowing
that experienced customers have a keen knowledge of “true” prices, offer such
customers lower prices as compared to other inexperienced customers. Fortunately, the survey I conducted collects data on prices that artisans charge, on
average, to retail clients for the Channapatna Bangle. The survey finds that
the average price that artisans obtain for the Channapatna bangle is Rs.32.50,
as determined by their answer to the question – “How much do you typically
sell half-inch bangles for?” This price is significantly higher than the average
initial price that both International and Indian-Craft auditors were offered,
indicating that not only did artisans offer these buyers prices that were not
equal to the average prices for bangles in the area, but they also seemed
to forgo substantial profits in order to be able to sell to more appreciative
customers. Experienced customers’ prior knowledge of true prices therefore,
does not seem to be driving differential pricing decisions here.
The results provided in this section, thus offer further confirmation of the theory that artisans’ pricing behavior is driven by identification with work.
55
0
10
Mean Initial Price
20
30
40
50
Figure A.1: Robustness Check for Artisans: Age
Indian-Baseline
Indian-Craft
BUYERS
Young Adult
International
Middle-Aged
Young Adult<= 40 years, Middle-Aged>40 years
Exchange Rate: Rs.50=$1
0
10
Mean Initial Price
20
30
40
50
Figure A.2: Robustness Check for Artisans: Work Tenure
Indian-Baseline
Indian-Craft
BUYERS
Junior
Junior<25 years in the trade, Senior>=25 years in the trade
Exchange Rate: Rs.50=$1
56
International
Senior
0
10
Mean Initial Price
20
30
40
50
Figure A.3: Robustness Check for Artisans: Presence of Neighboring Sellers
Indian-Baseline
Indian-Craft
BUYERS
Sparse
International
Dense
Sparse<=12 sellers, Dense>12 sellers in a 0.2 mile radius
Exchange Rate: Rs.50=$1
0
10
Mean Initial Price
20
30
40
50
Figure A.4: Robustness Check for Artisans: Distance from Highway
Indian-Baseline
Indian-Craft
BUYERS
Near
Near<=0.2 miles, Far>0.2 miles from highway
Exchange Rate: Rs.50=$1
57
International
Far
0
10
Mean Initial Price
20
30
40
50
Figure A.5: Robustness Check for Artisans: Business with Traders
Indian-Baseline
Indian-Craft
BUYERS
No Trader Business
International
Sells to Trader
Sells to Trader: In addition to selling to direct customers, artisan sells to trader
Exchange Rate: Rs.50=$1
0
10
Mean Initial Price
20
30
40
50
Figure A.6: Robustness Check for Artisans: Visits to Bangalore
Indian-Baseline
Indian-Craft
BUYERS
Bangalore Visit
International
No Visit
Bangalore Visit: Artisan went to Bangalore at least once in the month preceding the experiment
Exchange Rate: Rs.50=$1
58
0
10
Mean Initial Price
20
30
40
50
Figure A.7: Robustness Check for Artisans: Income
Indian-Baseline
Indian-Craft
BUYERS
Poor
International
Rich
Poor earns less than or equal to Rs.5000 a month, Rich have income greater than Rs.5000
Exchange Rate: Rs.50=$1
0
10
Mean Initial Price
20
30
40
50
Figure A.8: Robustness Check for Artisans: Religion
Indian-Baseline
Indian-Craft
BUYERS
Hindu
77% of Artisans and 13% of Traders are Muslim
Exchange Rate: Rs.50=$1
59
International
Muslim
0
10
Mean Initial Price
20
30
40
50
Figure A.9: Robustness Check for Artisans: Education
Indian-Baseline
Indian-Craft
BUYERS
Primary
International
Secondary
Primary<=6 years of education, Secondary>6 years of education
Exchange Rate: Rs.50=$1
60