Monthly Archives: September 2010

Importance of social capital in innovation

Steven Johnson has an interesting new book out called Where Good Ideas Come From.

He talks about a number of conditions that help make innovation possible (the fact that often it takes a long time for innovation to emerge from rough drafts of earlier ideas, and requires incubation of these neonate ideas).

But, one precondition he focuses on is the social dimension.  Often a breakthrough innovation requires marrying or “colliding” two partial ideas.  Sometimes these ideas rest on hunches, often residing in two separate individuals, and unless these hunches are brought together and connected, the innovation goes undiscovered.  [It's what Matt Ridley calls "When ideas have sex."] To do this we have to create spaces for people to get together so we can unlock this innovation, hence the import of the coffee house during the Enlightenment or Modernist Salons in Paris (what Steven calls the “Liquid Network”). Kevin Dunbar also documented how something as prosaic as the weekly lab meeting was where most of the innovation at a lab typically occurred, not while poring over the microscope.

What Steven Johnson is really talking about is social capital.  In fact Steven Johnson thinks that “connectivity” is the key engine of historical and American creativity: “Chance favors a connected mind.”  [This is analogous to the process Andrew Wiles used to  solve one of the great math riddles of all: Fermat's Last Theorem.]  Johnson thinks that the Internet will turn out to a net plus in this process.

An example of this collision of ideas to produce innovation is a neonatal warmer (to halve infant mortality) in developing countries. Timothy Prestero, Design that Matters, took the concept of a warmer, but used bicycle and auto parts from those countries so that when the warmer broke down, local mechanics could repair them.  It’s an analogy for the infusion of ideas from lots of different sources.

Another interesting example he draws on is showing how a few scientists in their spare time trying to compute Sputnik’s speed and ultimately its path from listening to its signal, ultimately led to putting up satellites to enable the military to know where its nuclear submarines were, and then ultimately to using these satellites to determine where one’s phone or car was.

On the topic of social capital and innovation, other game theory and social network research shows that often it is not your close ties that unlock this creativity and innovation but your weaker ties (that connect those to others who are a little less similar who are likely to have differing and highly valuable new ideas). Think cross-fertilization.  So one not only needs to create social spaces, but spaces and a mindset that lets you connect with your weaker ties (maybe someone in your lab with a different specialty or background, or someone at your school with a different focus, or a coffee shop that brings people together whose only connection is that they drink coffee every morning at 10 AM).

See Wired Interview with Steven Johnson and Kevin Kelly here.

See TED video with Steven Johnson here.

Why the revolution won’t be tweeted

Twitter Revolution - Flickr Photo by FrauleinSchiller

Malcolm Gladwell has an interesting column in the October 4, 2010 New Yorker called “Small Change.”

Gladwell asserts that claims of Twitter’s role in various uprisings in developing countries (like Moldova or Iran) have been exaggerated.  He cited Evgeny Morozov, a Stanford-based scholar who notes that “Twitter had scant internal significance in Moldova, a country where very few Twitter accounts exist.” And he cites Anne Applebaum who suggested in the Washington Post that the protest “may well have been a bit of stage-craft cooked up by the government.”  Golnaz Esfandiari in Foreign Policy wrote in Summer 2010 about Iran: “It is time to get Twitter’s role in the events of Iran right…Simply put: There was no Twitter Revolution inside Iran.”

What’s more interesting about the article is Gladwell’s dissection of various events during the Civil Rights (The sit-in at the Woolworth’s lunch counter in February, 1960, the Montgomery Bus Boycott, the Freedom Summer Campaigns).

Gladwell notes that social change and protest requires huge sacrifice and understandably one only engages in such sacrifice for one’s close friends (strong ties).

What makes people capable of this kind of activism? The Stanford sociologist Doug McAdam compared the Freedom Summer dropouts with the participants who stayed, and discovered that the key difference wasn’t, as might be expected, ideological fervor. “All of the applicants—participants and withdrawals alike—emerge as highly committed, articulate supporters of the goals and values of the summer program,” he concluded. What mattered more was an applicant’s degree of personal connection to the civil-rights movement. All the volunteers were required to provide a list of personal contacts—the people they wanted kept apprised of their activities—and participants were far more likely than dropouts to have close friends who were also going to Mississippi. High-risk activism, McAdam concluded, is a “strong-tie” phenomenon.

This pattern shows up again and again. One study of the Red Brigades, the Italian terrorist group of the nineteen-seventies, found that seventy per cent of recruits had at least one good friend already in the organization. The same is true of the men who joined the mujahideen in Afghanistan. Even revolutionary actions that look spontaneous, like the demonstrations in East Germany that led to the fall of the Berlin Wall, are, at core, strong-tie phenomena. The opposition movement in East Germany consisted of several hundred groups, each with roughly a dozen members. Each group was in limited contact with the others: at the time, only thirteen per cent of East Germans even had a phone. All they knew was that on Monday nights, outside St. Nicholas Church in downtown Leipzig, people gathered to voice their anger at the state. And the primary determinant of who showed up was “critical friends”—the more friends you had who were critical of the regime the more likely you were to join the protest.

So one crucial fact about the four freshmen at the Greensboro lunch counter—David Richmond, Franklin McCain, Ezell Blair, and Joseph McNeil—was their relationship with one another. McNeil was a roommate of Blair’s in A. & T.’s Scott Hall dormitory. Richmond roomed with McCain one floor up, and Blair, Richmond, and McCain had all gone to Dudley High School. The four would smuggle beer into the dorm and talk late into the night in Blair and McNeil’s room. They would all have remembered the murder of Emmett Till in 1955, the Montgomery bus boycott that same year, and the showdown in Little Rock in 1957. It was McNeil who brought up the idea of a sit-in at Woolworth’s. They’d discussed it for nearly a month. Then McNeil came into the dorm room and asked the others if they were ready. There was a pause, and McCain said, in a way that works only with people who talk late into the night with one another, “Are you guys chicken or not?” Ezell Blair worked up the courage the next day to ask for a cup of coffee because he was flanked by his roommate and two good friends from high school.

Twitter’s strength is in weak ties (which as Mark Granovetter showed are good for things like job search, and as Clay Shirky observes in Here Comes Everybody, the Internet can be great for engaging thousands of friends to track down one’s stolen Sidekick phone).  Gladwell also cites The Dragonfly Effect to show how these week internet ties can be great for finding a bone-marrow transplant.  But are these weak Internet ties useful in recruiting compatriots for the revolution: are we willing to be put in jail and protest just because we got a tweet?

Gladwell concludes:

Shirky ends the story of the lost Sidekick by asking, portentously, “What happens next?”—no doubt imagining future waves of digital protesters. But he has already answered the question. What happens next is more of the same. A networked, weak-tie world is good at things like helping Wall Streeters get phones back from teen-age girls. Viva la revolución.

Gladwell’s conclusions generally resonate with our research on social capital.  We’ve speculated before about whether Facebook, for example, cheapens the currency of friendship, and whether you’ll bring chicken soup to your Facebook friends to say nothing of joining Justin Timberlake’s revolution just because you are following his tweets.

Where I may disagree with Gladwell is whether Twitter can’t have value in changing the calculus of getting involved.  Undoubtedly, you are typically recruited through strong friendships but whether to participate is a mix of loyalty to one’s friends, loyalty to the cause, and some sense of the chances of success.  Imagine that these potential recruits are arrayed in their willingness to take risks, from those most willing to take a risk to those least:  think of the bigger risk takers as being further out on a tree limb.  But how far out one thinks one is out on this limb is not dictated by God but by one’s perception of where others are.  This is so because the risks of taking action (protesting) vary inversely to the number of people involved.  If one or two people break the law, the government will imprison them.  If a million people are breaking the law, the government lacks the power and resources to prosecute and imprison them and will have to give up. We often have imperfect information about the size of the movement.  Seeing massive protest crowds (from prior demonstrations or a current one) can change the calculus but I think tweets might too. Tweets might provide would-be protesters with more information about whether government is able to respond, how they are responding, where else people are protesting, how many are protesting, etc.  And all this information can induce would-be fence sitters to get off the fence and protest.  But I agree that they are most likely to be recruited through trusted compatriots.

Read Malcolm Gladwell’s “Small Change” article.  [Gladwell in the article also focuses on how some protests require a hierarchy, like the Montgomery Bus Boycott, and how the Internet does not make it easier to organize such a hierarchy.]

NYC Street-art trying to build social capital

This is a social capital friendly street art that is appearing around New York City.  I’m interested in learning more about whether it is working.  The artistic effort is called “Living Exercises”; not sure who the artist is.

One assumes there is a lot of self-selection going on here — the misanthropes are unlikely to sign up, but maybe this a useful social capital nudge for those of us interested in making new acquaintances.

[hat-tip to "How to Make Friends in Brooklyn"]

The importance of building social capital accidentally (UPDATED)

Mario Luis Small, (University of Chicago, Sociology), who spoke this summer at our SCHMI 2010 workshop, has a compelling recent book that we commend.  Mario is a wonderful person and a smart applied researcher, undertaking research with societal implications.

In his ground-breaking recent book Unanticipated Gains (Oxford University Press, 2009),  Small both focuses on how important social capital is to the health of mothers but also uses the book to explore “how social capital is built” since he thought there was a lot of research on the importance of social capital and a dearth on how to create it.  It represents a major advance in our collective knowledge.

He studied new mothers and daycare centers in the New York City area for two reasons:

  1. Daycare centers are diverse institutions (they come in for-profit, non-profit, state-run, privately-run, and religiously-run flavors);
  2. They are prime place for observing new ties being formed since many American parents deal with these during in their lives, they have high turnover, and catch mothers at a phase of their life when they are often interested in and likely to make new ties (children are an important channel through which we make new ties).  Daycare centers also come at a time in mothers’ life when they have big responsibilities (children) but low knowledge, which also makes networking very important (e.g.,  Who is a good local pediatrician? When do you worry about a rash?  When should you start on formula?  How warm does it need to be? What museums are child-friendly?).

Part of his research was about how social networks at daycare centers helped make mothers healthier and less depressed; he found significantly less depression in daycare centers where parents made more social ties and the quality of their information was much better.

But equally important was his conclusions about how social capital was built.  This is an excerpt from a piece he wrote for RSA about his research.

Levels of commitment

We interviewed the directors of many different kinds of childcare centers – 23 in all, ranging from the commercial to the nonprofit, the secular to the religious, the corporate to the standalone – and observed what staff, children, mothers and fathers (though few of the latter were visible) did over the course of operations.

At the end of our study, nothing surprised us more than how much the centers differed in their social capital. In some, most mothers forged new friendships among the other parents; together, they organized parties, arranged play dates, attended movies and dinners, and developed what many of them referred to as a new community. Joining the center had measurably transformed their social networks…. In other centers, mothers knew few, if any, of the other parents; they did not party or dine with them, or babysit their children. These centers served as little more than drop-off and pick-up locations. In one rare example, the director had even tried to build social capital but failed: she threw a pizza party for parents to socialize and almost none of them attended.

Flickr photo by Jason L Park

Mario’s central question is “why” did some succeed when other centers failed in building social capital?  He concludes that social capital was often the unintended consequence of an administrative policy.

The socially effective centers did not differ from the others in the amount of leisure time the mothers had at their disposal; in all of them, most mothers worked full-time. Race, class, lifestyle and neighborhood did not explain the difference, and nor did these centers have particularly heroic directors committed to creating a sense of community among the parents. On the contrary, few directors displayed any interest in building social capital for its own sake. Like the rest of us, they were busy; they had a center to run.

Instead, social capital typically emerged when directors were trying to accomplish some other task, one that gave parents opportunities to interact or incentives to cooperate. For example, many directors believed strongly that children should be exposed to zoos, museums, libraries, children’s parks and farms. But trips to these locations require many more adults than are needed in the classroom, to prevent children from sticking their hands in monkey cages, wandering off in parks or slipping into ponds at apple-picking expeditions. Since hiring more staff for these occasions was costly, the centers needed parents to attend. No parent volunteers, no field trips. Centers needed volunteers for other activities, too, such as sanding and painting playgrounds at the end of the year, contributing food for various ceremonies and raising money to keep tuition fees moderate. In some centers in low-income neighborhoods, mothers were expected either to raise a certain amount over the course of the year – usually about US$300 – or pay it out of pocket. To avoid paying the fee, parents had to volunteer for group fundraising activities, such as selling baked goods or holding raffles.

All of these activities – field trips, clean-ups, ceremonies and raffles – required interaction and socialisation with others; they obliged parents to meet, talk, exchange phone numbers, arrange schedules and get organized. As a result, the centers that imposed greater demands on parents provided opportunities and incentives that, over the course of weeks and months, stimulated the formation of social capital.

Mario also talks about how the daycare schedule helped build social capital.  Some centers had strict drop-off and pick-up times, with fines often running at rates as high as $10 a minute for every minute that one was late.  Other centers had lackadaisical attitudes toward drop-off and pick-up times.  The centers with rigid times, in turn had parents all arriving at nearly the same time to drop-off and pick-up their children.  Invariably, that time (just before or dropping off children) was a social capital gold mine: parents would ask other parents whether their child had had a certain behavioral problem, or would arrange playdates or would get advice about equipment, toys or books for their kid.  Mothers would seek out useful connections to tap if they were unavoidably detained at work, got a flat tire, or were stuck in a train, to have that other parent to pick up their child.  They might ask other mothers to babysit their children some time during the week in exchange for reciprocal favors.  This is another example of administrative policies designed with no attention to social-capital-building that had big consequences.  Every parent who didn’t form a social tie with others in a daycare center, regardless of their social class, cited flexible drop-off and pick-up times as the number one cause (and this was confirmed by the data).

Mario also found that the existence of a parent-teacher organization in a daycare center was a strong positive predictor of how much social capital was built.

The implication of Mario’s book is regardless of one’s organizational post, one should be more attuned to ways to build (or not destroy) social capital in the everyday policies; this is far more important than the intentional but infrequent organizational group get-together or pizza party.  The pizza party is not counter-productive, but since it is a rarity, it’s unlikely to be as consequential as the daily rhythms and patterns of the organization.

Mario notes that other research comes to broadly similar conclusions about the importance of organizational features in the building of social capital:  for example, Mitch Duneier’s work on restaurants; Maureen Hallinan’s work on schools; Frida Kerner Furman’s work on barbershops and salons; and work by Omar McRoberts and Chaeyoon Lim/Robert Putnam on houses of worship.

One of Small’s interesting findings was that one of the reasons that the daycare centers were so successful in building social capital was their homophily: they tended to draw other parents of similar socio-economic backgrounds, partly through where the centers were located, through their pricing structure and through who was eligible for government-supported programs.  Small speculated in a visit to Harvard (October 4, 2010) that the social capital gains exhibited by daycare centers would be less successful for a hypothetically new daycare center located in a mixed-income housing center and available only to its residents.  He also speculated that it would lead to more task-oriented conflict, of the kind that he observed in researching Unanticipated Gains.

We highly recommend the book for those interested in rebuilding our stock of social capital.  The book focuses much more on inter-organizational variance in building social capital (i.e., which organizational settings are more successful) than on within-organization variation in building social capital (i.e., who within a daycare center succeeds in building social ties).  He agrees that more research is needed on this second question:  the “mating” part of “meeting and mating.”  His book focuses more on what about the organization creates an important opportunity structure for building social capital.

Small also noted that the ties generally being created at these daycare centers are a strange hybrid of strong and weak ties.  Scholars like Granovetter focused on the strength of weak ties for accessing information (job leads, etc.) and the importance of strong ties for getting social support.  In general, Small finds daycare centers produce “compartmental intimates”; daycare parents use these networks both for exchanging important information relating to their children, but because of the fact that young children share all kinds of private information about parenting and because parenting often relates to many other intimate things like the quality of one’s relationship with one’s spouse, these daycare friendships often provided strong social support and friends felt comfortable talking about many personal items that directly or indirectly related to their parenting.  In this sense, these compartmental intimates offered some of the best of strong and weak ties.

Small engaged in an interesting dialogue with Robert Putnam about to what extent the focus on daycare centers obscures the role of agency (individuals’ efforts to build social capital).  Does the existence of these daycare centers substitute for personal agency and effort?  Does it compound inequalities in social capital creation.  Small thinks in general that they daycare centers are likely to reduce the class-based inequalities in social ties and Putnam’s instinct is the opposite.

From a policy perspective, Mario Small’s work suggests that if one were hypothetically figuring out how to invest $5,000 in childcare per low-income resident in an area, one would be far better providing a voucher to be used for childcare in an organizational setting, rather than a voucher for family daycare or a $5000 voucher to the mother.  Small found that the publicly-run centers also tended to maximize the social capital building:  they typically had parent associations (founded in their Head Start roots) and ran a lot more field trips.  They were also better about connecting parents to things like assistance if there domestic abuse issues, or access to dental and health exams.

Chapter 1 of Unanticipated Gains can be read here.

Video of Mario discussing his work.

An article Mario wrote on his research for RSA Journal available here.

Our digital past haunting us

I have commented earlier on the loss of privacy from online activities and the fact that prior actions of candidates may come back to haunt them in a YouTube/cellphone era.

Now the latest…Bill Maher has indicated he has hoarded embarrassing clips of  Christine O’Donnell’s (the Senate Republican nominee from Delaware) appearances on his show, Real Time With Bill Maher, and will reveal one a week until she comes on his show.

The first one he’s aired is her appearance on the show in 1999, concerned her dabbling in witchcraft.

The Friendship Paradox: using social networks to predict spread of epidemics

Nick Christakis and James Fowler (whose research we’ve previously highlighted) is back with research that shows how one can easily use “sensors” in a network to track and get early warning regarding the spread of epidemics.

They took advantage of the “friendship paradox” to do so.  In any real-life network, our friends are more popular than we are.  [This is true mathematically in any group with some loners and some social butterflies.  If you poll members in the group about their friendships, far more of those friends who are reported are going to be the social butterflies.  If far more people reported friendships with the loners, they wouldn't be loners.  See discussion here.]

Thus by asking random people in a network, in this case Harvard students, about their friends, researchers know that their friends are more centrally located in these networks.    Then one can track behavior among the random group and their friends, in this case the spread of H1N1 flu (swine flu) among 744 Harvard students in 2009.

Those more central in these networks (the “friend” group) got the flu a full 16-47 days earlier than the random group.  Thus, for public authorities, monitoring such a “friend” group could give one early indication of a spreading epidemic; they could serve as “canaries in the coal mine”.  If the process of spreading was person-to-person rather than being exposed to some impersonal information (via a website or a broadcast), one could also track the difference between a random group and a friend group to predict other more positive epidemics, like the spread of information, or the diffusion of a product, or a social norm.

We write in general on this blog about the positive benefits of social ties (social capital), but Fowler and Christakis’ study also shows you that having friends and being centrally located has its costs: in this case getting the flu faster.  [In some ways, this is analogous to Gladwell's discussion in the Tipping Point of how Mavens, Connectors and Salesmen may be disproportionately influential in the spread of ideas through networks, although Fowler and Christakis are far more mathematical in identifying who these central folks are.]

The “friends group manifested the flu roughly two weeks prior to the random group using one method of detection, and a full 46 days prior to the epidemic peak using another method.

‘We think this may have significant implications for public health,’ said Christakis. ‘Public health officials often track epidemics by following random samples of people or monitoring people after they get sick. But that approach only provides a snapshot of what’s currently happening. By simply asking members of the random group to name friends, and then tracking and comparing both groups, we can predict epidemics before they strike the population at large. This would allow an earlier, more vigorous, and more effective response.’

‘If you want a crystal ball for finding out which parts of the country are going to get the flu first, then this may be the most effective method we have now,’ said Fowler. ‘Currently used methods are based on statistics that lag the real world – or, at best, are contemporaneous with it. We show a way you can get ahead of an epidemic of flu, or potentially anything else that spreads in networks.’

Christakis also notes that if you provided a random 30% in a population with immunity to a flu, you don’t protect the greater public, but if you took a random 30% of the population, asked them to name their friends, and then provided immunization to their friends, in a typical network the “friend” immunization strategy would achieve as high immunity protection for the entire network as giving 96% of the population immunity shots, but at less than 1/3 the cost.

The following video shows how the nodes that light up first (markers for getting the flu) are more central and far less likely to be at the periphery of the social network.  The red dots are people getting the flu; the yellow dots are friends of people with the flu and the size of the dot is proportional to how many of their friends have the flu.

Good summary of this research and its implications here: Nick Christakis TED talk (June 2010) – How social networks predict spread of flu.  Nick also discusses some of the implications of computational social science, which we’ve previously discussed here under the heading of digital traces.  Nick discusses how one could use data gathered from these networks (either passively or actively) to do things like predict recessions from patterns of fuel consumption by truckers, to communicate with drivers of a road of impending traffic jams ahead of them (by monitoring from cell phone users on the road ahead of them how rapidly they are changing cell phone towers) to asking those central in a mobile cellphone network (easily mapable today) to text their daily temperature (to monitor for impending flu epidemics).  Obviously these raise issues of privacy, which Nick does not discuss.

News release of study

Academic article in PLoS ONE

James Fowler on The Colbert Report discussing the book by Fowler and Christakis called Connected.


Nick Christakis presenting a talk at TED — The Hidden Influence of Social Networks. (February 2010).  In the talk he notes that while almost half of the variation in our number of friends is genetically-based (46%), that another equally large portion (47%) of whether your friends know each other is a function of whether your friends are the type that introduce (“knit”) their friends together or keep them apart (what they call “transitivity”).  About a third of whether you are in the center of social networks or not is genetically inherited.  Christakis believes that these social networks are critically important to transmitting ideas, and kindness, and information and goodness; and if society realized how valuable these networks were, we’d focus far more of our time, energy and resources into helping these networks to flourish.

Firefighting and social capital

Flickr photo by Dawn M Armfield

Bob (Putnam) and I met with Steve McGirk Monday morning in Manchester, England.  Steve is the thoughtful and engaging Chief Fire Officer for the Greater Manchester Fire and Rescue Service.

He discussed the evolution of firefighting in the UK (and elsewhere) and how prevention and social capital has come to be at the heart of what he does.  It’s a concept that one wouldn’t have thought about initially, but makes a world of sense after you hear it.

The heavy local concentration of fire stations originated in Britain during the Second World War.  England was under the blitz (from Germany) and tall buildings were being firebombed in Birmingham, Manchester, or elsewhere; without many fire stations close to all these tall buildings in order to respond rapidly, buildings would burn, igniting neighboring ones and soon consume huge resources and countless lives.  Fire stations were located based on perceived “peak” demand and thus most of the time, fire station personnel were not used very heavily.

Since then, there has been a sea change in fire response.  It’s very hard politically to get rid of any fire stations, but the stations and the firefighters have been put to new uses.  Through the use of smoke alarms (sometimes provided and installed free) and firemen knocking door-to-door and helping residents understand in advance what might cause fire risks, the numbers of fire responses, firefighting deaths, etc. is back to levels not seen since the 1950s, despite a dramatically larger population.  Steve, as do all firefighting CEOs in UK, has a statutory obligation to make fire prevention be at the heart of what they do.  Steve says that we have “come to understand in recent years that fires are not random, but more typically are the outcome of social and economic factors” – it is lifestyle and behavior that are at the roots of most blazes.

It was also interesting but morbid to hear Steve relate that the much more prevalent use of man-made materials in buildings has caused fires to reach scorching heats much faster than fires consuming natural materials.  Steve said that man-made materials typically reach 2000 degrees Fahrenheit in 5-6 minutes.  Unless firefighters can reach fires in 2-3 minutes, the fires are often fatal.  Since it is not practical to have enough fire stations to ensure this response time, it has similarly put pressure on fire stations to focus as much on prevention as on firefighting.

They have also repurposed some of the stations. Steve related the very interesting story of an unused old carriage house behind a Moss Side fire station being turned into a boxing ring, staffed by the firefighters.  “I’m not sure exactly where the money came from.  I don’t want to ask too many questions”, Steve says with a wink.  The boxing ring and the fire station efforts are a rare neutral ground for the local gangs.  A youth involved in a recent Moss Side shooting was sentenced to 2.5 years in the gym, and is now a strong prospect for the 2016 UK Boxing Olympic team.  Similarly, it’s hard to get some youth to do Boy Scouts in the UK because it’s seen as nerdy, but being a Fire Corps Cadet, which preaches many of the same values, is cool.

Steve notes that culturally, this change has not always been easy.  Some of the older firefighters joined to be macho and fight fires, and getting them out knocking on doors and talking with residents about fire safety has taken some active prodding and required him to be hard-nosed:  he’s told firefighters that if they don’t adapt to the new culture, their jobs are on the line.

One can see how such a community-based approach, which originated with “community policing”, has now started to spread to firefighting.  Steve believes that in the UK’s tight budget environment, Emergency Response needs to be the next frontier for this community-centric approach.  [Specific cuts are likely to emerge in the next month from David Cameron’s overall targets announced early this summer.] Emergency Response costs (ambulance and the like) have soared in recent years, and he thinks that if this were merged together with firefighting, they could similarly dramatically reduce the need for Emergency Response through an “ounce of prevention”.  Not all of his fire stations now have boxing clubs but they are increasingly spreading such clubs or finding other ways to bring the community into firestations.

Underwriters start asking about social capital

Flickr photo by d2digital

I recently learned that Transamerica, at least, asks questions about social capital (participation in groups, volunteering, having a pet, etc.) for life insurance customers.  They won’t disclose what their criteria are for underwriting, but they believe that these activities (as research corroborates) reduce the threat of depression, and might implicitly be linked to life expectancy.  (Tip of the hat to Lew Feldstein)

For the moment, answers to these questions are not major factors in underwriting, but apparently make underwriters more comfortable taking on any client with a history of depression.

In the Saguaro Seminar, we posited that health insurers, in the same way as they give discounts for health club memberships, should give discounts to people who actively participated in groups, since this lowers the health risks of the insured.  We’ve written a bit about social capital and health insurance in the past, if you’re interested in reading more.