Peer_effects
The social multiplier effect is a term used in economics, economic geography, sociology, public health and other academic disciplines to describe certain social externalities. It is based on the principle that high levels of one attribute amongst one's peers can have spillover effects on an individual. "This social multiplier can also be thought of as a ratio ∆P/∆I where ∆I is the average response of an individual action to an exogenous parameter (that affects only that person) and ∆P is the (per capita) response of the peer group to a change in the same parameter that affects the entire peer group."[1] In other words, it is the ratio of an individual action to an exogenous parameter to the aggregate effect of the same parameter on the individual's peers.
For example, we know that health outcomes strongly correlate with education level. Given the social multiplier effect, we know that in the aggregate, if a poorly educated individual moves into a highly educated area they will experience some of the positive health effects associated with being more educated.[2] It is important however to distinguish between 1) a local-average model or social norms, whereby certain attributes are adopted based on them being the socially normal behavior, and 2) a local-aggregate model or social multiplier effect whereby "peer effects are captured by the sum of friends' efforts in some activity."[3] In the former an individual pays a price for deviating from a norm. In the latter, as an individual gains more peers who have a certain attribute, they will experience greater utility for adopting this attribute as well. The following are some examples of research on the social multiplier effect.