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The Social Multiplier

Author

Listed:
  • Edward L. Glaeser

    (Harvard University and NBER,)

  • Bruce I. Sacerdote

    (Dartmouth College and NBER,)

  • Jose A. Scheinkman

    (Princeton University,)

Abstract
Aggregate data is often 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 these contexts, there is a significant social multiplier. (JEL: HO, JO, CO) Copyright (c) 2003 The European Economic Association.

Suggested Citation

  • Edward L. Glaeser & Bruce I. Sacerdote & Jose A. Scheinkman, 2003. "The Social Multiplier," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 345-353, 04/05.
    • Handle: RePEc:tpr:jeurec:v:1:y:2003:i:2-3:p:345-353
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    References listed on IDEAS

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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, President and Fellows of Harvard College, vol. 116(2), pages 655-679.
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