Social networks and non-market valuations

Neilson, William S.; Wichmann, Bruno

doi:10.1016/j.jeem.2013.11.005

Cited by 18 publications

(10 citation statements)

References 36 publications

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“…3. Targeted subsidies or marketing policies to encourage the most interconnected agents in a social network (inuence hubs) to adopt low-carbon options (Neilson and Wichmann, 2014;Bloch et al, 2016).…”

Section: Resultsmentioning

confidence: 99%

The social multiplier of environmental policy: Application to carbon taxation

Konc¹,

Savin

Bergh

2021

Journal of Environmental Economics and Management

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We analyze the eectiveness of environmental policy when consumers are subject to social inuence. To this end, we build a model of consumption decisions driven by sociallyembedded preferences formed under the inuence of peers in a social network. This setting gives rise to a social multiplier of environmental policy. In an application to climate change, we derive Pigouvian and target-achieving carbon taxes under sociallyembedded preferences. Under realistic assumptions the social multiplier is equal to 1.30, allowing to reduce the eective tax by 38%. We show that the multiplier depends on four factors: strength of social inuence, initial taste distribution, network topology and income distribution. The approach provides a basis for rigorously analyzing a transition to low-carbon lifestyles and identifying complementary information and network policies to maximize the eectiveness of carbon taxation.

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Section: Resultsmentioning

confidence: 99%

The social multiplier of environmental policy: Application to carbon taxation

Konc¹,

Savin

Bergh

2021

Journal of Environmental Economics and Management

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“…The bottom panel reports DNE average estimates of the network quality parameter (β NET ). 17 The table shows that the expected value of the DNE estimates is very close to true parameter values. The proportional RMSEs are generally below 5% indicating the distributions of DNE estimates are quite narrow around true parameter values, especially for the network quality parameter β NET .…”

Section: Sne Market Sharesmentioning

confidence: 74%

“…Jackson and Watts [36] and Jackson and Rogers [37] are examples of papers that use the graph-theoretic approach. Neilson and Wichmann [17] use sociometric approach to develop a valuation model in which social networks influence the utility that individuals obtain from public goods. The sociometric approach is also used by DeGroot [38] and DeMarzo et al [39] to model social influence in unidimensional opinion models.…”

Section: Social Network Effects On Alternative Availabilitymentioning

confidence: 99%

“…The discrete choice literature has focused on choice behavior of self-interested and socially isolated individuals. Economic theory has evolved to develop models that consider a broader range of determinants of behavior like impure altruism (Andreoni [14]), fairness (Rabin [15]), morality (Levitt and List [16]), social networks (Neilson and Wichmann [17]), to name a few. The empirical literature has evolved to provide support for these behaviors.…”

Section: Introductionmentioning

confidence: 99%

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Social Networks and Choice Set Formation in Discrete Choice Models

2016

Self Cite

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The discrete choice literature has evolved from the analysis of a choice of a single item from a fixed choice set to the incorporation of a vast array of more complex representations of preferences and choice set formation processes into choice models. Modern discrete choice models include rich specifications of heterogeneity, multi-stage processing for choice set determination, dynamics, and other elements. However, discrete choice models still largely represent socially isolated choice processes-individuals are not affected by the preferences of choices of other individuals. There is a developing literature on the impact of social networks on preferences or the utility function in a random utility model but little examination of such processes for choice set formation. There is also emerging evidence in the marketplace of the influence of friends on choice sets and choices. In this paper we develop discrete choice models that incorporate formal social network structures into the choice set formation process in a two-stage random utility framework. We assess models where peers may affect not only the alternatives that individuals consider or include in their choice sets, but also consumption choices. We explore the properties of our models and evaluate the extent of "errors" in assessment of preferences, economic welfare measures and market shares if network effects are present, but are not accounted for in the econometric model. Our results shed light on the importance of the evaluation of peer or network effects on inclusion/exclusion of alternatives in a random utility choice framework.

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“…Indeed, environmental economics in general has tended to treat people as individuals, making their own choices independent of others, largely ignoring social networks, peer effects, and related interconnections. There are some examples of research studies that provide a foundation for such work (Timmins and Murdock 2007; Neilson and Wichmann 2014) but there is room for more conceptual and empirical work in this area, including research on the possibility of interactions (complementarity or substitutability) between the values of human interactions and access to nature.…”

Section: Society Culture and Valuesmentioning

confidence: 99%

What Can Environmental Economists Learn from theCOVID‐19 Experience?

Pannell¹,

Adamowicz²

2020

Applied Eco Perspectives Pol

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The responses of policy makers, individuals, and businesses to COVID‐19 contrast with typical responses to environmental issues. In most countries, governments have been willing to act decisively to implement costly restrictions on work and personal life, to a degree that has never been observed for an environmental issue. A number of possible lessons for environmental economists are identified. In addition to valuing natural environments, people also place a high value on social interactions. These two values may interact. Adaptation can substantially reduce the cost of restrictive policies and should be considered when policy proposals are being evaluated. Preparation for an emergency can substantially reduce its costs by allowing a more rapid response. The development of new technologies can play a key role in reducing externalities. As well, the effectiveness of policies that deliver public goods can be enhanced by credible leaders who provide clear, compelling, and consistent information, emphasizing both the private and public benefits of compliance.

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Social networks and non-market valuations

Cited by 18 publications

References 36 publications

The social multiplier of environmental policy: Application to carbon taxation

The social multiplier of environmental policy: Application to carbon taxation

Social Networks and Choice Set Formation in Discrete Choice Models

What Can Environmental Economists Learn from theCOVID‐19 Experience?

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