Your Friends, Your Credit: Social Capital Measures Derived from Social Media and the Credit Market

Jesse Bricker and Geng Li
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Jesse Bricker: https://www.federalreserve.gov/econres/jesse-bricker.htm

No 2023-048, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Chetty et al. (2022a) introduced an array of social capital measures derived from Facebook friendships and found that one of these indicators, economic connectedness (EC), predicted upward income mobility well. Bricker and Li (2017) proposed the average credit score of a community's residents as an indicator of local social trust. We show in this paper that the average credit scores are robustly correlated with EC, negatively correlated with the friending-bias measure introduced in Chetty et al. (2022b), and predict economic mobility to a comparable extent after controlling for EC. The consistency and complementarity between these two indicators, despite being derived from individuals' activities in distinct contexts, underscore trust as a crucial component of social capital and provide insights that are useful for understanding the formation and accumulation of social capital.

Keywords: social trust; social capital; economic mobility; credit score (search for similar items in EconPapers)
JEL-codes: D14 G10 G41 G50 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2023-07
New Economics Papers: this item is included in nep-pay, nep-soc and nep-ure
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Related works:
Journal Article: Your friends, your credit: Social capital measures derived from social media and the credit market (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:96647

DOI: 10.17016/FEDS.2023.048

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