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The Social Multiplier

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Author Info
Edward L. Glaeser
Bruce I. Sacerdote
Jose A. Scheinkman

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Abstract

In many cases, aggregate data is used to make inferences about individual level behavior. If there are social interactions in which one person's actions influence his neighbor's incentives or information, then these inferences are inappropriate. The presence of positive social interactions, or strategic complementarities, implies the existence of a social multiplier where aggregate relationships will overstate individual elasticities. We present a brief model and then estimate the size of the social multiplier in three areas: the impact of education on wages, the impact of demographics on crime and group membership among Dartmouth roommates. In all three areas there appears to be a significant social multiplier.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9153.

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Date of creation: Sep 2002
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Handle: RePEc:nbr:nberwo:9153

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  1. Jens Ludwig & Greg J. Duncan & Paul Hirschfield, 2001. "Urban Poverty And Juvenile Crime: Evidence From A Randomized Housing-Mobility Experiment," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 655-679, May. [Downloadable!] (restricted)
  2. Glaeser, Edward L & Sacerdote, Bruce & Scheinkman, Jose A, 1996. "Crime and Social Interactions," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 507-48, May. [Downloadable!] (restricted)
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  3. Claudia Goldin & Lawrence F. Katz, 2002. "The Power of the Pill: Oral Contraceptives and Women's Career and Marriage Decisions," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 730-770, August. [Downloadable!] (restricted)
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  4. Rauch James E., 1993. "Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities," Journal of Urban Economics, Elsevier, vol. 34(3), pages 380-400, November. [Downloadable!] (restricted)
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  5. Edward L. Glaeser & Jose A. Scheinkman, 2001. "Non-Market Interactions," Harvard Institute of Economic Research Working Papers 1914, Harvard - Institute of Economic Research. [Downloadable!]
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  6. Bruce Sacerdote, 2001. "Peer Effects With Random Assignment: Results For Dartmouth Roommates," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 681-704, May. [Downloadable!] (restricted)
  7. Lawrence F. Katz & Jeffrey R. Kling & Jeffrey B. Liebman, 2001. "Moving To Opportunity In Boston: Early Results Of A Randomized Mobility Experiment," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 607-654, May. [Downloadable!] (restricted)
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  8. Brock, William A & Durlauf, Steven N, 2001. "Discrete Choice with Social Interactions," Review of Economic Studies, Blackwell Publishing, vol. 68(2), pages 235-60, April.
  9. Daron Acemoglu & Joshua Angrist, 1999. "How Large are the Social Returns to Education? Evidence from Compulsory Schooling Laws," Working papers 99-30, Massachusetts Institute of Technology (MIT), Department of Economics.
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  10. repec:att:wimass:199127 is not listed on IDEAS
  11. Manski, Charles F, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Blackwell Publishing, vol. 60(3), pages 531-42, July. [Downloadable!] (restricted)
  12. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. [Downloadable!] (restricted)
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