Cities and the structure of social interactions: Evidence from mobile phone data

The impact of telecommunication technologies on the role of cities depends on whether these technologies and face-to-face interactions are substitutes or complements. We analyze anonymized mobile phone data to examine how distance and population density affect calling behavior. Exploiting an exogenous change in travel times as well as permanent relocations of individuals, we find that distance is highly detrimental to link formation. Mobile phone usage significantly increases with population density even when spatial sorting is accounted for. This effect is most pronounced for local interactions between individuals in the same catchment area. This indicates that face-to-face interactions and mobile phone calls are complementary to each other, so that mobile phone technology may even increase the dividends of density.