The social multiplier effect is a term used in

economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and intera ...

economic geography Economic geography is the subfield of human geography which studies economic activity and factors affecting them. It can also be considered a subfield or method in economics. There are four branches of economic geography. There is, primary secto ...

sociology Sociology is a social science that focuses on society, human social behavior, patterns of Interpersonal ties, social relationships, social interaction, and aspects of culture associated with everyday life. It uses various methods of Empirical ...

public health Public health is "the science and art of preventing disease, prolonging life and promoting health through the organized efforts and informed choices of society, organizations, public and private, communities and individuals". Analyzing the det ...

and other academic disciplines to describe certain social

externalities In economics, an externality or external cost is an indirect cost or benefit to an uninvolved third party that arises as an effect of another party's (or parties') activity. Externalities can be considered as unpriced goods involved in either co ...

. It is based on the principle that high levels of one attribute amongst one's peers can have

spillover effect In economics a spillover is an economic event in one context that occurs because of something else in a seemingly unrelated context. For example, externalities of economic activity are non-monetary spillover effects upon non-participants. Odors f ...

s on an individual. "This social multiplier can also be thought of as a ratio ∆P/∆I where ∆I is the average response of an individual action to an

exogenous In a variety of contexts, exogeny or exogeneity () is the fact of an action or object originating externally. It contrasts with endogeneity or endogeny, the fact of being influenced within a system. Economics In an economic model, an exogeno ...

parameter (that affects only that person) and ∆P is the (per capita) response of the peer group to a change in the same parameter that affects the entire peer group." In other words, it is the ratio of an individual action to an exogenous parameter to the aggregate effect of the same parameter on the individual's peers. For example, we know that health outcomes strongly correlate with education level. Given the social multiplier effect, we know that in the aggregate, if a poorly educated individual moves into a highly educated area they will experience some of the positive health effects associated with being more educated. It is important however to distinguish between 1) a local-average model or

social norms Social norms are shared standards of acceptable behavior by groups. Social norms can both be informal understandings that govern the behavior of members of a society, as well as be codified into rules and laws. Social normative influences or soci ...

, whereby certain attributes are adopted based on them being the socially normal behavior, and 2) a local-aggregate model or social multiplier effect whereby "peer effects are captured by the sum of friends' efforts in some activity."Xiandong Liu et al. "Social Multiplier versus Social Norms: What Matters Most for Outcomes?" Center For Economic Policy Research: 2013. Retrieved on 25 February 2016. http://www.voxeu.org/article/social-multiplier-versus-social-norms-what-matters-most-outcomes. In the former an individual pays a price for deviating from a norm. In the latter, as an individual gains more peers who have a certain attribute, they will experience greater utility for adopting this attribute as well. The following are some examples of research on the social multiplier effect.

Examples

Researchers Scott E. Carrell, Mark L. Hoekstra, and James E. West have shown that one's friends' fitness affects one's own fitness. They find that "each out-of-shape individual creates two additional out-of-shape individuals through their social interactions." Another researcher Jeffery Fletcher has found that a 10 percent increase in the number of students who smoke at a high school increases the chances another student will smoke by about 3 percent. Xiaodong Liu et al. have found that there is a multiplier effect for

juvenile delinquency Juvenile delinquency, also known as juvenile offending, is the act of participating in unlawful behavior as a minor or individual younger than the statutory age of majority. In the United States of America, a juvenile delinquent is a person ...

in schools. Additionally, in another article Carrell, West, and Frederick V. Malmstrom find that peer cheating increases the likelihood that an individual will cheat. The social multiplier effect is of particular concern to researchers in economic geography. It is well documented that factors like income and education have strong positive correlations with many aspects of health. This is important because the geographic distribution of income and education is becoming increasingly stratified. For example, since 1980, on average, cities that had high levels of college educated workers are becoming increasingly college educated whereas those who had low levels are becoming increasingly less educated. The same trend applies to income. Consequently, as the distribution of income and education level becomes more disparate, many low income regions lose out on the social multiplier benefits they once enjoyed.

Measurement challenges

Using only

observational data In fields such as epidemiology, social sciences, psychology and statistics, an observational study draws inferences from a sample to a population where the independent variable is not under the control of the researcher because of ethical concern ...

, a researcher may find it impossible to disentangle social interactions within a group from other types of similarities within a group. This challenge to the

identifiability In statistics, identifiability is a property which a model must satisfy for precise inference to be possible. A model is identifiable if it is theoretically possible to learn the true values of this model's underlying parameters after obtaining an ...

of social multiplier effects is known in

econometrics Econometrics is the application of Statistics, statistical methods to economic data in order to give Empirical evidence, empirical content to economic relationships.M. Hashem Pesaran (1987). "Econometrics," ''The New Palgrave: A Dictionary of ...

as the "reflection problem", following an influential 1993 paper by Charles F. Manski. Manski considers three types of hypotheses to explain why members of a group might behave similarly to each other: *endogenous effects, in which group behavior affects individual behavior directly; *exogenous effects or contextual effects, in which

exogenously In a variety of contexts, exogeny or exogeneity () is the fact of an action or object originating externally. It contrasts with endogeneity or endogeny, the fact of being influenced within a system. Economics In an economic model, an exogeno ...

determined characteristics of the group affect individual behavior; *correlated effects, in which group members only behave similarly because they have individual characteristics in common. The three effects cannot be distinguished if the researcher does not know how groups are constructed, but only endogenous effects can produce social multipliers. Though Manski wrote that the reflection problem can only be overcome if the researcher has information on how individuals enter into groups, such as in an

experiment An experiment is a procedure carried out to support or refute a hypothesis, or determine the efficacy or likelihood of something previously untried. Experiments provide insight into Causality, cause-and-effect by demonstrating what outcome oc ...

al setting, more recent work has highlighted alternative ways of overcoming the problem in common settings.

Examples

Measurement challenges

See also

References

Further reading