Homophily and Segregation in Social Networks: An Economics Perspective

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May 06, 2014
from 05:30 PM to 06:30 PM


Ken Edwards Building, Lecture Theatre 1

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0116 252 2320

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Professor Sergio Currarini

Department of Economics

Lecture Summary

A pervasive and well-documented feature of social and economic networks is that contacts tend to be more frequent among similar agents than among dissimilar ones. This pattern, usually referred to as ”homophily”, applies to many types of social interaction, and along many dimensions of similarity, including ethnicity, religion, gender, age, ideology, etc… The presence of homophily, and of the implied social segregation, has important implications on how information flows along the social network and, more generally, how agents’ characteristics impinge on social behaviour. It is therefore important to understand more about the main sources of homophily, under which conditions these translate into social segregation and discrimination, and what kind of affirmative action can be desirable and effective.

In this lecture I will review my own contribution to this field of research, and briefly discuss the directions of my current and future work. The lecture will touch upon the following issues and contributions:

On the Sources of Homophily: Opportunity vs. Preferences

As an empirical pattern, homophily may result from various types of biases in the way agents meet and establish social ties. Preferences that are biased in favour of one’s own type may affect both the intensity and the direction of search; exogenous constraints in the meeting process may generate opportunity biases and affect the social network.
Studying High School Friendships from a large sample of multi-ethnic American Schools, we were able to:

- Establish a series of empirical patterns of in-group and cross-groups friendships;
- Show how the observed patterns of homophily imply a substantial bias in both preferences and opportunities;
- Show that these biases vary substantially across ethnic groups;
- Argue that assortative matching is likely to play a crucial role.

The Role of the Network: Meeting Friends of Friends and Long Run Integration

Under what condition, and to what extent, a given bias in preferences translates into segregation of social relations? And how does the answer depend on the technology of social encounters? For instance, would a society where new acquaintances are mostly made through the existing ties display larger or smaller degrees of segregation in the long run? We show that if the bias in preferences only applies to strangers and not to friends of friends, then society becomes perfectly integrated in the long run. Substantial segregation occurs if the bias also applies to friends of friends.

Homophily, Segregation and Discrimination: an Experimental Study

While homophily refers to the tendency to link to similar agents, discrimination mainly refers to differential treatment of similar and dissimilar agents in socio-economic transactions. We study these two types of behavior in a controlled laboratory experiment. We find that homophily is strongly correlated with a measure of risk aversion. We also find that larger degrees of homophily are associated with stronger economic discrimination. However, comparing treatments in which agents can assort according to their preferences with treatments in which there are randomly matched, we find that within the former the average level of discrimination is lower.




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