One important community characteristic that has been shown to affect individual contributions to public goods (Habyarimana et al. 2007), and participation in community activities (Alesina and La Ferrara, 2000) is ethnic fragmentation. Albania is ethnically homogenous; however, as discussed in Section 2.2, there seems to be significant cultural and linguistic differences between the north and the south of the country. The more isolated north, which used to rely on a patriarchal tribal system oriented around the institutions of clan and blood feuds, is characterized by a lower percentages of cooperating parents as compared to the south (73% vs. 76%) although the difference is not statistically significant (p = 0.22). Comparing cooperation in the four main geographical areas of Tirana, the Coast, the Centre and the Mountain shows that parental cooperation in the game is significantly lower in the coastal area. One reason might be the recent flow of migrants from the Mountain to the Coastal area, and the consequently growing linguistic and cultural fragmentation in the region. Finally, while Albania is a prevalently Muslim country, a significant number of followers of other religions (Orthodox and Catholic Christianity) exist.<sup>29</sup> Based on the LSMS data, we constructed a district-level proxy for religious heterogeneity, i.e., a dummy equal to 1 if in the district there is no religion whose followers constitute more than 90 percent of the population, and 0 otherwise. About 60 percent of the districts are religiously heterogeneous, and the percentage of cooperating parents in these districts is 73 percent, against 78 percent in the homogenous districts; the difference is significant at the 5 percent level.

In Table 4, we conduct probit regressions on individuals‟ decisions to invest in the group account in the game. We report marginal effects for continuous explanatory variables and the effect of a change from 0 to 1 for dichotomous explanatory variables. In column 1 we control for demographics, and in column 2 we add individual measures of social capital. Given the significant differences in behavior across districts, in column we add community characteristics generated by the school survey and the LSMS. Finally, in column 5 we add dummies for the Coastal, the Mountain, the Central and Tirana geographical areas.

The estimates in Table 4 show that wealthier individuals are more likely to invest in the group account, whereas no significant differences based on age, gender and education exist. Among the social capital measures, the number of relatives in the session increases cooperation in the game. This is not surprising, as the number of relatives among other participants is likely to affect one‟s beliefs about others‟ willingness to cooperate. This is consistent with altruism,<sup>30</sup> amplified by conditional cooperation,<sup>31</sup> being stronger within families. The fact that the presence of “friends” in the session does not have a similar effect confirms that Albania is a close-knit, family oriented society.

Table 4 columns 3 and 5 indicate that religious heterogeneity significantly reduces parents‟ cooperativeness in the game. However, the religious heterogeneity dummy becomes insignificant (p =

> 29 In three districts the majority of the population is Catholic, and in one district the majority is Orthodox. 30 See Andreoni (1990).

> 31 See Fischbacher et al. (2001).

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