Relational Externalities of Institutional Interventions

Institutions seek to shape the behaviors of their constituents. Because individuals are embedded in complex webs of social relations, by intervening in their personal behaviors, institutions may unwittingly reshape network structure. In this paper, I introduce the concept of relational externalities — the unintended relational consequences of a policy or intervention . I elaborate the conditions under which these relational externalities are likely to take place, what they may look like under these different conditions, and the role they play in creating inequalities or amplify existing ones. I then empirically illustrate this concept through the case of the punishment of smoking behavior in a sample of U.S. high schools. I show that harsh punishment of smoking behavior is associated with the social isolation of smokers and increased homophily on smoking status in friendship networks. A subsequent exploration of the mechanisms behind these effects reveals that they are likely driven by non-smokers eschewing friendships with smokers. Finally, I show that relational externalities of anti-smoking policies are most acute for students with the least behavioral elasticity with regards to smoking. Students who are least able to change their behaviors -- have a higher genetic predisposition to nicotine dependence -- change their friends, putting them at a dual disadvantage.