IDEAS home Printed from https://ideas.repec.org/p/fip/fedgfe/96647.html
   My bibliography  Save this paper

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

Author

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.

Suggested Citation

  • Jesse Bricker & Geng Li, 2023. "Your Friends, Your Credit: Social Capital Measures Derived from Social Media and the Credit Market," Finance and Economics Discussion Series 2023-048, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:96647
    DOI: 10.17016/FEDS.2023.048
    as

    Download full text from publisher

    File URL: https://www.federalreserve.gov/econres/feds/files/2023048pap.pdf
    File Function: Full text
    Download Restriction: no
    File URL: https://www.federalreserve.gov/econres/feds/files/feds-2023048-data.zip
    File Function: Data
    Download Restriction: no
    File URL: https://libkey.io/10.17016/FEDS.2023.048?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Raj Chetty & Matthew O. Jackson & Theresa Kuchler & Johannes Stroebel & Nathaniel Hendren & Robert B. Fluegge & Sara Gong & Federico Gonzalez & Armelle Grondin & Matthew Jacob & Drew Johnston & Martin, 2022. "Social capital I: measurement and associations with economic mobility," Nature, Nature, vol. 608(7921), pages 108-121, August.
    2. Goldin, Claudia D. & Katz, Lawrence F., 1999. "Human Capital and Social Capital: The Rise of Secondary Schooling in America, 1910–1940," Scholarly Articles 29429088, Harvard University Department of Economics.
    3. Raj Chetty & Matthew O. Jackson & Theresa Kuchler & Johannes Stroebel & Nathaniel Hendren & Robert B. Fluegge & Sara Gong & Federico Gonzalez & Armelle Grondin & Matthew Jacob & Drew Johnston & Martin, 2022. "Social capital II: determinants of economic connectedness," Nature, Nature, vol. 608(7921), pages 122-134, August.
    4. Jane K. Dokko & Jessica Hayes & Geng Li, 2015. "Credit Scores and Committed Relationships," Finance and Economics Discussion Series 2015-81, Board of Governors of the Federal Reserve System (U.S.).
    5. Durante, Ruben & Mastrorocco, Nicola & Minale, Luigi & Snyder, James, 2023. "Unpacking Social Capital," CEPR Discussion Papers 18024, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Boneva, T. & Golin, M. & Kaufmann, K. & Rauh, C., 2022. "Beliefs About Maternal Labor Supply," Janeway Institute Working Papers 2230, Faculty of Economics, University of Cambridge.
    2. Tsvetkova, Milena & Olsson, Henrik & Galesic, Mirta, 2024. "Social networks affect redistribution decisions and polarization," OSF Preprints bw7ux_v1, Center for Open Science.
    3. David E. Campbell, 2023. "Social Capital in a Divided America: The Relationship between Economic Bridging and Affective Polarization," The ANNALS of the American Academy of Political and Social Science, , vol. 708(1), pages 102-120, July.
    4. Juan Imbet & J. Anthony Cookson & Corbin Fox & Christoph Schiller & Javier Gil-Bazo, 2024. "Social Media as a Bank Run Catalyst," Post-Print hal-04660083, HAL.
    5. Yulia Evsyukova & Felix Rusche & Wladislaw Mill, 2023. "LinkedOut? A Field Experiment on Discrimination in Job Network Formation," CRC TR 224 Discussion Paper Series crctr224_2023_482, University of Bonn and University of Mannheim, Germany.
    6. D’Agostino, T.J. & Madero, Cristóbal, 2023. "The Machuca experience: A retrospective case study of school-based socio-economic integration," International Journal of Educational Development, Elsevier, vol. 100(C).
    7. Youssef Souidi, 2023. "Options attractives et ségrégation entre classes : quels effets de la suppression des sections bilangues et européennes à la rentrée 2016 ?," Institut des Politiques Publiques halshs-04439102, HAL.
    8. Castriota, Stefano & Rondinella, Sandro & Tonin, Mirco, 2023. "Does social capital matter? A study of hit-and-run in US counties," Social Science & Medicine, Elsevier, vol. 329(C).
    9. D’Agostino, TJ & Madero, Cristóbal, 2024. "How integration changed us: The long-term impact of socio-economic school integration," International Journal of Educational Development, Elsevier, vol. 109(C).
    10. Blanco, Hector & Neri, Lorenzo, 2023. "Knocking It Down and Mixing It Up: The Impact of Public Housing Regenerations," IZA Discussion Papers 15855, Institute of Labor Economics (IZA).
    11. Boby, Maria & Oh, Hyunsung & Marsiglia, Flavio & Liu, Li, 2024. "Bridging social capital among Facebook users and COVID-19 cases growth in Arizona," Social Science & Medicine, Elsevier, vol. 360(C).
    12. Obstfeld, David, 2023. "Higher aims fulfilled: The Social Capital Academy as a means for advancing underrepresented students in comprehensive university business schools," Business Horizons, Elsevier, vol. 66(5), pages 631-642.
    13. Gutierrez-Lythgoe, Antonio, 2023. "El capital social y el autoempleo en EEUU: Evidencia con datos de Facebook [Social Capital and Self-Employment in the United States: Evidence from Facebook Data]," MPRA Paper 119068, University Library of Munich, Germany.
    14. Balakina, Olga & Bäckman, Claes & Parakhoniak, Anastasiia, 2024. "Beyond connectivity: Stock market participation in a network," SAFE Working Paper Series 416, Leibniz Institute for Financial Research SAFE.
    15. Francesca Maria Calamunci & Federico Fabio Frattini, 2023. "When Crime Tears Communities Apart: Social Capital and Organised Crime," Working Papers 2023.08, Fondazione Eni Enrico Mattei.
    16. Horrigan, John B. & Whitacre, Brian E. & Galperin, Hernan, 2024. "Understanding uptake in demand-side broadband subsidy programs: The affordable connectivity program case," Telecommunications Policy, Elsevier, vol. 48(8).
    17. Robert Braid, 2024. "Alternative forms of remuneration at the Holy Spirit Hospital of Marseille in the Fourteenth century," Post-Print hal-04573252, HAL.
    18. Christa N. Gibbs & Benedict Guttman-Kenney & Donghoon Lee & Scott Nelson & Wilbert Van der Klaauw & Jialan Wang, 2024. "Consumer Credit Reporting Data," Staff Reports 1114, Federal Reserve Bank of New York.
    19. Keith Meyers & Melissa A. Thomasson, 2021. "Can pandemics affect educational attainment? Evidence from the polio epidemic of 1916," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 15(2), pages 231-265, May.
    20. Connor, Dylan Shane & Berg, Aleksander K & Kemeny, Tom & Kedron, Peter, 2023. "Who gets left behind by left behind places?," SocArXiv nkydt_v1, Center for Open Science.

    More about this item

    Keywords

    social trust; social capital; economic mobility; credit score;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • G50 - Financial Economics - - Household Finance - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedgfe:96647. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ryan Wolfslayer ; Keisha Fournillier (email available below). General contact details of provider: https://edirc.repec.org/data/frbgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.