Home News How researchers are using economics to help explain adolescent addiction

How researchers are using economics to help explain adolescent addiction

New research is pushing the boundaries of how economic theory can be applied, with important implications for understanding social issues like smoking and alcohol use.

Melbourne Business School Assistant Professor of Economics Onur Ozgur

A new paper co-authored by Dr Onur Ozgur looking into health risk behaviour by young people is the focus of the latest Research Within Reach report (PDF, 2MB) released this week.

Dr Ozgur is an Assistant Professor of Economics at Melbourne Business School who teaches managerial economics and investments to MBA students, as well as conducting research that breathes new life into the field.

An economic theorist who looks at how social connections and interactions influence behaviour, Dr Ozgur wants to drive home the message that economics must take into account the social structures we all exist within, and not just focus on individuals as "isolated atoms".

"I am interested in social and group determinants of individual behaviour, which until recently has been the missing link in economics," he says.

Traditional applications of economic theory have focused on the individual without taking into account their connection to others – something Dr Ozgur and others are trying to change.

To help achieve that goal, Dr Ozgur and three colleagues – Tiziano Arduini of the University of Bologna, Elonora Paracchini from Cornell University and Alberto Bisin from NYU – decided to study how social connections can influence risky health behaviour.

The four researchers set out to measure the impact that social factors such as friends, family, neighbourhood and school had on drinking and smoking among adolescents by structuring them as a dynamic game on a network.

What made the project possible was having access to the right longitudinal data – which, until recently, had not been easy to aggregate or access.

"Twenty years ago, we did not have access to this kind of rich data at the individual level," Dr Ozgur says.

"Google, Facebook, and Amazon have changed the nature of the game, and now we have richer data which allow researchers as well as businesses to come up with more sophisticated strategies and methods to explain what people do and why they do it."

The study, titled Dynamic Social Interactions and Health Risk Behavior, took four years to complete and yielded a range of insights about the influence of social connections on smoking and alcohol use over time.

Just as important as the individual findings is the progress the study has made in clearing a way forward for researchers to use economic models to analyse other social problems.

"Our study confirms the existence of addiction effects, social interaction effects, as well as a forward-looking component characterising students' health risk behaviour," Dr Ozgur says.

"Furthermore, this study provides a unique methodology and easy-to-apply cookbook algorithms and other tools that can be used by researchers from any related disciplines, to help answer similar questions regarding long-term consequences of how connections influence individual behaviour."

Research Within Reach is a regular publication from Melbourne Business School designed to explain the latest research by our academic faculty in easy-to-understand language. You can download the latest report here (PDF, 2MB).