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How who you know affects who you are — Pop Economics

How who you know affects who you are

by Pop on June 1, 2010

Post image for How who you know affects who you are

Your friends can make you fat.

And I don’t mean by baking you stuff.

A few years ago, scientists released the results of a 32-year obesity study in the New England Journal of Medicine. Pardon the description if you’re already familiar with it.

Scientists followed about 12,000 people over a 32-year time period, many of whom ran in the same social circles, and tried to assess what common factors led to many of them becoming obese. It turned out that who those studied became friends with was incredibly important. In fact, if someone’s friend became obese, he or she became 57% more likely to become obese himself. If someone’s brother or sister became obese, his or her chances increased by 40%. And if it was a spouse, the chances rose 37%.

The study caused a pretty big stir. Obesity, the scientists concluded, was a social contagion—not only was it a disease, as some psychologists had said for years, but it was a communicable disease. Seeing someone close catch it could lead to you catching it. In short, your friends can make you fat.

The social contagion phenomenon—sometimes I wonder if I should just call it “peer pressure”, but let’s stick with the fancy words—appears in other areas of consumption too. If your mom’s, friend’s cousin is a heavy drinker, to paraphrase a story in Time magazine, you’re 15% more likely to be a heavy drinker too. But as you can imagine, your social network can lead to all sorts of influence, including in your finances.

If your friends default on a mortgage…

In the middle of last year, economists Luigi Guiso, Paola Sapienza, and Luigi Zingales released a study showing what made homeowners more or less apt to strategically default on their mortgages. To the uninitiated, a “strategic default” is one in which a homeowner decides to turn the keys over to his mortgage company even though he can still afford the monthly payment, something that’s become increasingly common as more homeowners find they owe 10% to 20% more than their homes are worth.

The study concluded that about 26% of the defaults they studied were strategic and found that a homeowner’s moral views on a default played strongly into their likelihood to do so. More pertinent to this discussion, however, was how people’s social networks affected their decision. People who knew someone else who defaulted were 82% more likely to declare their intention to default than people who didn’t know a non-payer, even after you control for moral qualms.

In other words, your friends not only make you fat, they can make the social barriers to breaking a mortgage contract come crumbling down.

If your friends are generous…

James Fowler and Nicholas Christakis recruited volunteers to play games in which they had the chance to contribute money to each other to build good will. The volunteers only interacted with each individual once. So their resulting behavior couldn’t come from becoming friends over the course of the games or any quid pro quo.

What did they find? If one volunteer was generous, the object of their generosity was more likely to be generous himself as the games went on. In the end, the effect of the first person’s gift was multiplied up to three times as the targets of his giving gave of themselves.

Not to bring this happy trend down a peg, but if the subjects of the games started to encounter not-so-generous participants, their likelihood to be generous to the next guy also decreased as the games went on. Scrooge-ism is apparently as contagious as good will.

If your friends are happy…

You know that Liberty Mutual ad where a chain of people do little good deeds for each other? Here’s a reminder:

One of the more depressing bits I remember gathering from that commercial is how truly shocked several of the actors look that someone would do such an incredibly small favor for a stranger. But I digress…it turns out, there might be a little science behind that phenomenon. The same guys who did the obesity and generosity studies, Fowler and Christakis, have done a lot of other work looking at social contagion. One of their other focuses of research homed in on one of my favorite areas of study: what makes us happy.

You could have seen this punchline coming from a mile away. If your friends are happy, you’re happier. According to surveys designed to figure out how happy you are, if your friend is happy, you’re 15% more likely to be happy too. If your friend’s friend is happy, you’re 10% more likely to be happy—I’m sure that has something to do with the second-degree friend making your own friend happy. And if your friend twice-removed is happy, you’re almost 6% more likely to be happy.

I’ve yet to see a scientist try to put some of their work to use. If someone gets rid of his fat, unhappy, and selfish friends, is he more likely to be thin, happy, and generous? Is there any way to avoid social contagion? Or on the other hand, if we try to create artificial connections with people better than us, can we force ourselves to “catch” their good habits? After all, it seems like making friends with someone who’s good with money is a lot easier to do than simply giving yourself the goal of improving your money habits.

Just food for thought. If you’re interested in reading more about social networks and their effects on our behavior, check out Fowler and Christakis’s book, Connected: The Surprising Power of Our Social Networks and How They Shape Our Lives.


{ 4 comments… read them below or add one }

Rob Bennett June 1, 2010 at 9:08 am

I believe this.

Say that you’re due to bat fourth in the inning and the three fellows who go up to the plate before you get hits. You go up there expecting to get a hit too. And the odds that you will therefore go up.

We’re social beings.


Ruthie June 18, 2010 at 4:48 pm

Rather than kicking the friends to the curb, what about being the catalyst for improvement in your current circle of friends? See it as added incentive for improving your health and your finances that in the process you may also be affecting the well-being of some of your favorite people?

tentaculistic August 9, 2010 at 4:48 pm

I can believe it about fat/thin – for me it’s friends, but also the prevailing culture, and I do believe we are mightily influenced by what is around us! In both France and Maine, my husband and I were obsessed with noticing how thin everyone was, and (probably not coincidentally) how many people biked to work, work clothes and all. There was some strong positive peer pressure at work there, and we both ate better on those trips than when we went to the South for vacation. (Oh, and we both have started biking to work, I think the germ of the idea started in those vacations)

My contention is with the statement about people who know someone who default on a mortgage are in turn more likely to do so. That seems like a pretty good causation-correlation mix-up. Think about how people work — we like to go through life staying in our own narrow band of comfort, and usually it means being surrounded by people just like us. So (with all due respect to people who were unfairly screwed by this economy) the likelihood that someone would default on a mortgage has to be at least somewhat correlated to income. I would guess that friends tend to band together at income levels, and so knowing someone who defaulted and defaulting oneself would be correlation rather than causation, i.e. financially shaky people will often have financially shaky friends. (Again, no disrespect to the people who were swept off their feet by this whole housing bubble boondoggle)

Now that I think of it, obesity itself has a large (ahem) financial component, at least in the U.S. and other developed countries, in which obesity and income have an inverse relationship – poor/fat, thin/rich. I looked at the study in the link, and in the section on statistical analysis it appears that the study’s authors did not factor in income level (although they did look at education level, which is, tragically for many grads, not a perfect indicator of income). I wonder if income, and friends/family tending to band at income levels, could have any input into this obesity infection phenomenon.

Mercedes September 7, 2010 at 4:20 pm

Cheaper to buy Food that is Bad for you than Good for you. Food banks will provide stuff High in bad stuff, more quanity than quality.

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