Citation

Discussion Paper Details

Please find the details for DP1811 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Herd Effects and Migration

Author(s): Gil S Epstein and Arye L. Hillman

Publication Date: March 1998

Keyword(s): clustering, Herd Behaviour, Migration and Network Externalities

Programme Area(s): Human Resources

Abstract: In this paper we introduce the notion of herd effects or information cascades into models of migration-related phenomena. We consider individuals making sequential decisions regarding emigration. Each individual receives a signal which conveys private information regarding preferred locations abroad, and also observes the decisions made by previous emigrants. The herd behaviour which ensues gives rise to geographical concentration in host countries of immigrants from the one location. We show how herd effects can be expected to have both efficiency and political-economy consequences. We expect international factor allocation predicated on herd effects to be inefficient. Herd effects can also be the source of social tensions when the host country?s resident population is xenophobic. In general, herd effects can lead to incorrect personal location decisions, since people are led to discount their private information. We also compare herd effects with the network-externalities explanation of immigrant concentration.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1811

Bibliographic Reference

Epstein, G and Hillman, A. 1998. 'Herd Effects and Migration'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1811