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

Like Father, Like Son: Social Network Externalities and Parent-Child Correlation in Behavior 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 ) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Microeconomics American Economic Association

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

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Publisher
American Economic Association
Copyright
Copyright © 2009 by the American Economic Association
Subject
Articles
ISSN
1945-7685
eISSN
1945-7685
DOI
10.1257/mic.1.1.124
Publisher site
See Article on Publisher Site

Abstract

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 )

Journal

American Economic Journal: MicroeconomicsAmerican Economic Association

Published: Feb 1, 2009

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