Urban Social Structure, Social Capital and Spatial Proximity

42 Pages Posted: 24 Mar 2015

See all articles by Eleonora Patacchini

Eleonora Patacchini

Einaudi Institute for Economics and Finance (EIEF) ; IZA Institute of Labor Economics

Pierre M. Picard

Centre de Recherche en Économie Appliquée (CREA); Universite du Luxembourg

Yves Zenou

Monash University - Department of Economics; Stockholm University; Research Institute of Industrial Economics (IUI); IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Date Written: March 2015

Abstract

We develop a theoretical model where the existence and intensity of dyadic contacts depend on location. We show that agents tend to interact more with agents that are highly central in the network of social contacts and that are geographically closer. Using a unique geo-coded dataset of friendship networks in the United States, we find evidence consistent with this model. The main empirical challenge, which is the possible endogenous network formation, is tackled by employing a Bayesian methodology that allows to estimate simultaneously network formation and intensity of network contacts.

Keywords: Bayesian estimation, endogenous network formation, geographical space, Social interactions, social space

JEL Classification: R1, R23, Z13

Suggested Citation

Patacchini, Eleonora and Picard, Pierre M. and Zenou, Yves, Urban Social Structure, Social Capital and Spatial Proximity (March 2015). CEPR Discussion Paper No. DP10501, Available at SSRN: https://ssrn.com/abstract=2584018

Eleonora Patacchini (Contact Author)

Einaudi Institute for Economics and Finance (EIEF) ( email )

Via Due Macelli, 73
Rome, 00187
Italy

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Pierre M. Picard

Centre de Recherche en Économie Appliquée (CREA) ( email )

Campus Limpertsberg
162A, avenue de la Faïencerie
Luxembourg, 1511
Luxembourg

Universite du Luxembourg

L-1511 Luxembourg
Luxembourg

Yves Zenou

Monash University - Department of Economics ( email )

Australia

Stockholm University ( email )

Universitetsvägen 10
Stockholm, Stockholm SE-106 91
Sweden

Research Institute of Industrial Economics (IUI) ( email )

P.O. Box 5501
S-114 85 Stockholm
Sweden

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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