Like Father, Like Son: Social Network Externalities and Parent-Child Correlation in Behavior

Antoni Calvó-Armengol and Matthew Jackson

American Economic Journal: Microeconomics, 2009, vol. 1, issue 1, 124-50

Abstract: We build an overlapping generations model where an individual sees higher returns to adopting a behavior as many neighbors adopt the behavior. We show that overlap in the state of a parent and child's neighborhood can lead to correlation in parent-child behavior independent of any parent-child interaction. Increasing the sensitivity of individual decisions to the state of their social community leads to increased parent-child correlation and less efficient (more costly) behavior on average in the society. We show this model is distinguished from a direct parental influence model, in that it predicts increased generational effects, implying residual correlation between children and grandparents after including parental information. (JEL J12, J13, Z13)

JEL-codes: J12 J13 Z13 (search for similar items in EconPapers)
Date: 2009
Note: DOI: 10.1257/mic.1.1.124
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Citations: View citations in EconPapers (41)

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