Flooded Social Connections

Abstract

Does salient information on social media influence individuals' economic decisions and beliefs? Using aggregated data from Facebook and a difference-in-differences strategy, I show that individuals who are socially connected to someone affected by Hurricane Harvey are more likely to purchase flood insurance policies after the event. This effect is stronger in areas at higher risk of flooding. Being socially connected to someone affected by Hurricane Harvey also influences individuals' perceptions of global warming.

Keywords: social networks, flood insurance, hurricane harvey

JEL Classification: D03, D11