Friends with Benefits: Social Capital and Household Financial Behavior

Brad Cannon, David Hirshleifer and Joshua Thornton

No 32186, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using friendship data from Facebook, we find that among three aspects of social capital, Economic Connectedness — the fraction of one’s social network with high income, has the strongest and most robust relationship with stock market and saving participation. One standard-deviation greater Economic Connectedness is associated with 10.6% greater stock market participation and 9.2% greater saving participation. Evidence from non-local friendships supports a causal link between household financial behavior and the income of one’s friends. Our results indicate that the effect of Economic Connectedness on participation derives from opportunities to interact with high-SES individuals rather than from class-based friending propensities.

JEL-codes: D14 D15 D63 G4 G40 G41 G5 G50 G51 I3 I30 I31 I38 O16 (search for similar items in EconPapers)
Date: 2024-03
New Economics Papers: this item is included in nep-mfd, nep-net and nep-soc
Note: AP DEV
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.nber.org/papers/w32186.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:32186

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w32186

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().