There is some fascinating research from Michigan State University about the use of online social networking sites by college students and the effect on their social capital. For non-economists, social capital is one of the three types of capital or “wealth”. The other two types are physical capital (what you own e.g. a computer, machines, money) and human capital (skills, experience). The third type of capital is your social connections – or social capital.
The study found that Facebook allows people to keep in contact with communities more efficiently, hence increasing their social capital. The authors of the study wrote, “Social capital has been linked to a variety of positive social outcomes, such as better public health, lower crime rates, and more efficient financial markets.” In addition, there was a correlation between Facebook usage and psychological well-being.
Of course, Facebook started off as a social networking site for college students only. Hence, it encouraged people to develop their relationships with people within their local college communities and people who they know offline which is more useful social capital than that which would be gained through forums and sites such as Digg.
The study goes on to look at two different types of social capital: bonding (cementing networks of homogenous groups of people) and bridging (social networks of socially heterogeneous groups of people). The argument is that some types of social capital are bad: criminal gangs, racist and extremist groups have high levels of bonding capital. The study found that Facebook tends to generate the good type of social capital: bridging.
Perhaps my criticism of the study is how it can be shown that Facebook causes an increase in social capital. To me, it seems pretty likely also that people with greater social capital will be more likely to sign up to Facebook.
But it’s certainly an interesting study. There certainly hasn’t been much study in the general area but I think it’s an area which needs studying: just as the web allowed us to enhance our human capital by learning more about different kinds of things, the social web will allow us to enhance social capital.
The “social web” may have drastic implications for our society and economy.