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The Demand for Social Interaction

  • Henry Saffer

In this paper social interaction is modeled as a consumer good. Social interaction may provide an externality in the form of social capital, but the primary reason that individuals engage in social interaction is that these activities directly yield utility. It is important to note that some measures of social interaction show declines while many do not. A model of household production is employed to derive the demand for social interaction. The model shows that the demand for social interaction is a function of its price, the price of other goods and income. The role of children and marriage in social interaction can also be explained in the model. The theory is tested with data from the General Social Survey (GSS) and the results show that social interaction can be explained as the consequence of utility maximizing behavior by individuals. Increases in education generally increase memberships but reduce visiting with relatives and friends. Increases in income generally increase memberships and some forms of visiting. The model predicts 70 percent, or more, of the time trends in social interaction. These results are in contrast to social capital theorists who have focused on the declines in social interaction and who have attributed these changes to factors such as increased community heterogeneity and increased television viewing.

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File URL: http://www.nber.org/papers/w11881.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11881.

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Date of creation: Dec 2005
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Publication status: published as Saffer, Henry, 2008. "The demand for social interaction," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(3), pages 1047-1060, June.
Handle: RePEc:nbr:nberwo:11881
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  1. Michael, Robert T, 1973. "Education in Nonmarket Production," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages 306-27, Part I, M.
  2. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
  3. Joel Sobel, 2002. "Can We Trust Social Capital?," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 139-154, March.
  4. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 333-38, May.
  5. Michael Grossman, 1972. "The Demand for Health: A Theoretical and Empirical Investigation," NBER Books, National Bureau of Economic Research, Inc, number gros72-1, October.
  6. Dora L. Costa & Matthew E. Kahn, 2001. "Understanding the Decline in Social Capital, 1952-1998," NBER Working Papers 8295, National Bureau of Economic Research, Inc.
  7. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
  8. Dora L. Costa & Matthew E. Kahn, 2003. "Understanding the American Decline in Social Capital, 1952--1998," Kyklos, Wiley Blackwell, vol. 56(1), pages 17-46, February.
  9. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," NBER Working Papers 7580, National Bureau of Economic Research, Inc.
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