You should have already realized that all of your internet activity, such as social media, search engines, etc., leaves your digital fingerprints. In today’s interconnected world, you should assume your online profile, pictures and posts become the intellectual property of the online entities you use . So, it should not faze you that Facebook founder and CEO Mark Zuckerberg testified before Congress this week because of ongoing privacy concerns. This week’s congressional dog and pony show will most likely not reveal much. Nor is it expected to change social media’s influence on the public.
Does social media really affect your opinions and decision making? Maybe.
Content providers have been criticized for deciding what people view through alleged censorship. Besides your online social interactions and connections, the ads you see can also influence your opinions and behavior. Consider Facebook’s targeted advertising system, which has been criticized for violating the Fair Housing Act. A recent lawsuit alleges that certain groups are being discriminated against because advertisers can target ads based on age, gender, disability, family status, among other criteria (see Facebook Vowed to End Discriminatory Housing Ads. Suit Says It Didn’t; nytimes.com/2018/03/27/nyregion/facebook-housing-ads-discrimination-lawsuit.html).
In the internet age, data collection is big business. Data collection allows marketing firms to target classes with their clients’ products and opinions. Content providers have not only been criticized for collecting volumes of personal data, but also for manipulating search results and viewable content. As it turns out, the FANGs (a collective term used for content providers, such as Facebook, Amazon, Netflix, Google) not only collect your data but can influence your opinions and behavior. Especially when it comes to buying or renting a home.
You can surmise that real estate content providers (such as Zillow and Realtor.com) shape your opinions too! They publish opinions and research about the housing market. They also can influence your choice of real estate professionals. They promote agents who pay for placements on their sites to get consumer leads. These real estate professionals touted as “local experts.”
Social media influences housing decisions
A landmark study found direct evidence of social media’s impact on real estate choices. The 2017 study by Baily, Cao, Kuchler, and Stroebel (The Economic Effects of Social Networks: Evidence from the Housing Market; July 4, 2017; Available at SSRN: dx.doi.org/10.2139/ssrn.2753881) used Facebook data to explore the multiplicity of individuals’ social networks, and then analyzed the effects of people’s interactions on their housing decisions.
They found that, indeed, social media does influence decisions on housing. The research suggests that social media influences a person’s housing market expectations. When friends experience home price increases, home buyers will pay more for a home and/or buy a larger home. Additionally, renters are more likely to buy a home. Likewise, when friends experience “less positive house price changes,” home sellers are more likely to accept a lower sale price. The data also indicates that people will consider real estate an appealing investment when friends experience large home price increases.
The authors acknowledged that although this study examined social media’s influence on real estate outcomes, they suggest that effect is broader and can be applied to other subject matter.
Content providers wield great power. They manipulate news feeds via algorithms. They can also decide who they can ban from their sites. It’s clear that social media’s influence goes beyond data collection. It’s not only the social interaction among your connections that affect your opinions and behaviors. It’s also the paid ads and promoted opinions that appear alongside your friends’ posts that solidify expectations and opinions as gospel.
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.