![]() We investigated whether the different stories that Amy and Ben hear from their friends affected whether they considered buying a house in New York to be a good investment. Ben has more friends living in Chicago, which has seen much lower house price growth, and hears far fewer stories about fast house price growth. Amy has many friends who live in San Diego, a housing market that has been booming over the past decade, and therefore often hears her friends talk about rising house prices. Consider two neighbors living in New York, Amy and Ben. This project started from the observation that different people living in the same neighborhood can be exposed to very different housing market experiences through their social networks. In a paper with Michael Bailey and Rachel Cao, we showed that individuals are more likely to consider housing a good investment - and are in fact more likely to actually purchase a house - if their friends experienced larger recent house price increases. In a first series of papers, we studied the effect of social interactions in the housing market. Shaping Beliefs and Behaviors in the Housing Market Here we review some of our findings from this body of work, which uses both deidentified individual-level data and publicly available aggregated data on social connections between geographies. Facebook is unique in its scale and coverage: at the end of 2020, the social network had 2.8 billion active users globally and 258 million active users in the United States and Canada, providing a rare opportunity to measure real-world social networks at population scale. Over the past years, we have worked with deidentified data on social connections from Facebook to expand our understanding of the role of social networks across a large number of settings in economics and finance. 1 Traditionally, however, it has been challenging to analyze and quantify the economic effects of social interactions, in large part because of the absence of large-scale and representative data on social networks. ![]() Researchers have long understood that social interactions can shape many aspects of social and economic activity, including migration, trade, job-seeking, investment behavior, product adoption decisions, and social mobility. Transportation Economics in the 21st Century.Training Program in Aging and Health Economics.The Roybal Center for Behavior Change in Health.Retirement and Disability Research Center.Measuring the Clinical and Economic Outcomes Associated with Delivery Systems.Improving Health Outcomes for an Aging Population.Early Indicators of Later Work Levels, Disease and Death.Conference on Research in Income and Wealth.Boosting Grant Applications from Faculty at MSIs.Productivity, Innovation, and Entrepreneurship.International Finance and Macroeconomics.
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