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Me and Lady Gaga

You are connected by “Six Degrees of Separation” to almost everyone. This surprising amount of connectedness was brought home to me when I realized that I knew a person who knew Lady Gaga (One Degree of Separation). The connection had nothing at all to do with my career or that of Stefani Germanotta, but only with our respective networks of family and friends.

Economists have gotten as excited as anyone else by social networks. A previous blog post talked about intra-ethnic-group networks that are useful for enforcing contracts and deterring cheating. Another important social network function is spreading information. A paper forthcoming in the American Economic Review by Tim Conley and Chris Udry describes how Ghanaian farmers were more likely to succeed at growing pineapples for export the more successful were neighbors already growing pineapples. Pineapple growing is very sensitive to having too much or too little fertilizer, so it was useful that farmers could adapt their fertilizer use based on what had worked for their neighbors.

A similar paper finds that farmers in Mozambique are more likely to adopt a profitable new crop (sunflowers) if someone in their family and friends network had done so. They were somewhat less likely to do so if somebody in the village of the same religion (mainly Catholic v. Protestant) was an adopter, while it had no effect if someone in the village of a different religion was an adopter.

The conclusion is that social networks are a great way to spread success (although I have yet to benefit from Lady Gaga’s knowledge of how to do a music video that gets 175 million hits on YouTube). Unfortunately, networks can also explain persistent poverty, since the poor are out of luck if there is no success to spread in poor people’s social network.

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5 Comments

  1. Hannah wrote:

    I have read interesting articles explaining how social networking in impoverished communities can also lead to disaster. If one farmer grows a successful crop, many will adopt it the next year and the economies of the area will not equal out. It becomes important that these seeds of change are sustainable and economically feasible and are not just the latest trend.

    Posted April 12, 2010 at 7:43 am | Permalink
  2. Sadder but Wiser wrote:

    Good post. This effect has long been observed in public health. In communities where the AVERAGE level of women’s education is higher, infant and child health have been found to be higher even in households where the mother herself has little or no education (and controling for income, etc.). This diffusion effect operates both directly (through discussion) and indirectly (through modeling). This may also be one of the germs of truth that helped sprout the expression, “It takes a village to raise a child.”

    Posted April 12, 2010 at 10:39 am | Permalink
  3. Dan Kyba wrote:

    Social networks can work for bad or for good; the examples given by this post come from participants in the market economy which is a positive sum game; it therefore makes sense for the participants to co-operate since everyone receives some benefit from such mutual public goods investments.
    When life is a zero sum game, as occurs on some Aboriginal reserves, with long-term welfare recipients or among improperly socialised individuals, the participants tear each other down under the assumption of “more for you means less for me”.
    In the developing world, parts of society will slowly drift from a positive sum to a zero sum game when their countries get caught in a resource trap and turn into rentier and distributional states.

    Posted April 12, 2010 at 12:06 pm | Permalink
  4. Scott Andrews wrote:

    I have seen social media (Facebook) help link students in Kampala with work, volunteer opportunities and job hunting. I can also keep in touch with my colleagues in Uganda using Facebook which helps me evaluate our program’s success. I look at social networks in the developing world with great optimism. Lol @ Lady Gaga, hopefully that connection pays off at some point. You get her to write the forward to your next book ;-p.

    Scott

    Posted April 12, 2010 at 1:24 pm | Permalink
  5. Christina wrote:

    Knowing people who know people who know people is obviously very helpful for building connections. Humans are sociable creatures by nature. If you sit back and refuse to communicate, you will not go very far.

    Posted April 12, 2010 at 1:59 pm | Permalink