Monday, 21 March 2022

Social capital and success in the adult film industry

In economics, capital can be simply defined as 'things that can be used to produce other things'. Taking a broad interpretation of 'things' allows us to recognise intangible forms of capital, such as human capital (our education, knowledge, and experience) and social capital (our connections with others, trust, and shared understandings). These intangible forms of capital make people more productive (which is what makes them capital), but intangible forms of capital are more difficult to measure than physical or financial forms of capital.

How much more productive does social capital make people? That is a difficult question to answer, in most part because of the difficulty of measuring social capital. However, I recently ran across an interesting attempt to measure the gains from social capital in the adult film industry, described in this article by Jochen Lüdering (Justus-Liebig-Universität Gießen), published in the journal Applied Economics in 2018 (ungated earlier version here).

Lüdering collated data on performers in the adult film industry, based on the Internet Adult Film Database, and covering the period from 1970 to 2013. He then captured the 'network structure' of the industry, based on each performer (as a 'node') and all of the other performers that they appeared in at least one film with (the connections between nodes are referred to as 'undirected links'). The network structure can be summarised in various ways in order to try to measure social capital. Lüdering uses 'Eigenvector centrality', which is a measure of how much 'influence' a node (in this case, an adult film performer) has on the rest of the network, based on how well-connected they are, and how well-connected their connections are.

In terms of the 'success' (as Lüdering refers to it) of each performer, Lüdering uses the length of time each performer remained in the industry. He justifies this as:

...this article relies on survival (time active) in the industry as a measure of economic success for individual performers and argues that one person stays in the industry as long as (economic) benefits exceed costs. In this argument, ‘costs’ should be defined in very broad terms and should include all kinds of adverse effects for the person.

The argument is that more 'successful' performers will receive greater benefits from their performances, and therefore remain in the industry for longer. There are good arguments why that might not be the case though, if performers have a 'target' for lifetime earnings and stop performing when they reach their target (there is evidence that taxi drivers labour supply exhibits such income targeting, for example, but this evidence is contested). Putting aside that concern, in a survival analysis Lüdering finds that:

Ones eigenvector centrality is both significant and negative; this implies that a central actor in the network has a lower probability to experience an event (i.e. drop out of the industry) in the following period. Being disconnected from the network increases the risk to experience an event...

For a person twice as central as the median performer, the relative hazard is reduced by about one-third. 

In other words, social capital (as proxied by connectedness or influence within the network of adult film performers) is correlated with the length of time an adult film performer remains in the industry. More-connected performers remain in the industry for longer, which Lüdering suggests means that more-connected performers are more successful. I'm not sure I necessarily agree (as per my critique on the measure of success above). The length of time a performer remains in the industry doesn't necessarily tell us about the value they generate, or their productivity. We would need some additional data (which Lüdering acknowledges), and a follow-up study, for that. However, it is clear how important social capital is in this context.

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