Last updated on January 17, 2012
From a recent NBER working paper by Banerjee et al.:
We examine how participation in a microfinance program diffuses through social networks. We collected detailed demographic and social network data in 43 villages in South India before microfinance was introduced in those villages and then tracked eventual participation. We exploit exogenous variation in the importance (in a network sense) of the people who were first informed about the program, “the injection points”. Microfinance participation is higher when the injection points have higher eigenvector centrality. We estimate structural models of diffusion that allow us to (i) determine the relative roles of basic information transmission versus other forms of peer influence, and (ii) distinguish information passing by participants and non-participants. We find that participants are significantly more likely to pass information on to friends and acquaintances than informed non-participants, but that information passing by non-participants is still substantial and significant, accounting for roughly a third of informedness and participation. We also find that, conditioned on being informed, an individual’s decision is not significantly affected by the participation of her acquaintances.
The emphasis is mine, for those of you who want the news they can use.
I have not yet had a chance to read this paper, but I believe it is part of a trend away from pure impact evaluation and toward the investigation of causal mechanisms — the key words in the abstract being “structural models of diffusion.”