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Abstract The social networks that interconnect groups of people are often “multi-layered”—comprised of a variety of relationships and interaction types. Although researchers increasingly acknowledge the presence of multiple layers and even measure them separately, little is known about whether and how different layersfunctiondifferently. We conducted a field experiment in twelve villages in rural Uganda that measured real multi-layer social networks and then tracked their use in response to new, discussion-provoking information about refugees. We find that people who received our information treatment discussed refugees with more people, selected discussion partners from neighbors in the multi-layer network, and used most of the layers to do so. Treatment kicked off conversations throughout the villages that also included control respondents; treated and control both selected discussion partners from their networks who shared their attitudes towards refugees and were particularly interested in the subject. Our results point to multi-layer networks of day-to-day interactions as a source of prospective discussion partners when new information arises, especially layers based on shared meals, homestead visits, and money borrowing. When a relationship is based on multiple of these layers, it is even more likely to facilitate discussion. Furthermore, the selection of discussion partners from these networks depends less on any one particular layer and more on characteristics of the tie relative to the topic at hand.
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Changes in Social Network Structure in Response to Exposure to Formal Credit Markets
Abstract We show that the entry of formal financial institutions can have far-reaching and long-lasting impacts on informal lending and social networks more generally. We first study the introduction of microfinance in 75 villages in Karnataka, India, 43 of which were exposed to microfinance. Using difference-in-differences, we show that networks shrank more in exposed villages. Moreover, links between households that were both unlikely to borrow from microfinance were at least as likely to disappear as links involving likely borrowers. We replicate these surprising findings in the context of a randomised controlled trial (RCT) in Hyderabad, where a microfinance institution randomly selected 52 of 104 neighbourhoods to enter first. Four years after all neighbourhoods were treated, households in early-entry neighbourhoods had credit access longer and had larger loans. We again find fewer social relationships between households in these neighbourhoods, even among those ex-ante unlikely to borrow. Because the results suggest global spillovers, atypical in usual models of network formation, we develop a new dynamic model of network formation that emphasizes chance meetings, where efforts to socialize generate a global network-level externality. Finally, we analyse informal borrowing and the sensitivity of consumption to income fluctuations. Households unlikely to take up microcredit suffer the greatest loss of informal borrowing and risk sharing, underscoring the global nature of the externality.
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- Award ID(s):
- 2018554
- PAR ID:
- 10437935
- Publisher / Repository:
- Oxford University Press
- Date Published:
- Journal Name:
- Review of Economic Studies
- ISSN:
- 0034-6527
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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