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No Place like Home: Opinion Formation with Homophily and Implications for Policy Decisions

Author

Listed:
  • Önder, Ali Sina

    (Uppsala Center for Fiscal Studies)

  • Portmann, Marco

    (University of Fribourg.)

  • Stadelmann, David

    (University of Bayreuth and CREMA)

Abstract

We demonstrate a simple model of opinion diffusion where a local opinion leader acts as the initiator of public discussion. We show the possibility of driving a significant wedge between opinions of two groups that exhibit homophily even though individuals are highly conformist. In particular, we show that there exists an opinion gap between the group which the opinion leader belongs to (referred to as the residence community) and the other group; and this opinion gap is increasing in the relative size of the residence community. Using a unique dataset of national referenda in Switzerland from 2008 to 2012, we show that members of parliament (MPs) match referenda outcomes in their residence communities closer than they do in neighboring communities, and this wedge interacts signi cantly with the relative size of the residence community, thus aligning with our theoretical conjectures. We conclude that observed opinion gaps can actually be overrated to the extent that they are driven by structures that underlie the social web of different groups within the society.

Suggested Citation

  • Önder, Ali Sina & Portmann, Marco & Stadelmann, David, 2015. "No Place like Home: Opinion Formation with Homophily and Implications for Policy Decisions," Working Paper Series, Center for Fiscal Studies 2015:4, Uppsala University, Department of Economics.
    • Handle: RePEc:hhs:uufswp:2015_004
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    References listed on IDEAS

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    More about this item

    Keywords

    Opinion Leadership; Diffusion; Homophily; Communication in Networks; Voter Preferences; Representation;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • H79 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other

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