Happy people tend to be located in the centre of their local social networks and in large clusters of other happy people. The happiness of an individual is associated with the happiness of people up to three degrees removed in the social network. Happiness, in other words, is not merely a function of individual experience or individual choice but is also a property of groups of people. Indeed, changes in individual happiness can ripple through social networks and generate large scale structure in the network, giving rise to clusters of happy and unhappy individuals. These results are even more remarkable considering that happiness requires close physical proximity to spread and that the effect decays over time.
This spread of noticeable influence up to three degrees of separation is found in other phenomena as well: obesity and smoking habits are the two solid examples. As the author notes, this raises the question of how extensive this pattern of spread is:
We conjecture that this phenomenon is generic. We might yet find that a "three degrees of influence rule" applies to depression, anxiety, loneliness, drinking, eating, exercise, and many other health related activities and emotional states, and that this rule restricts the effective spread of health phenomena to three degrees of separation away from the ego.
If this is the case, it would need to be factored into one's moral life, because your habits, moods, and the like may have noticeable effects on people several times removed from you.
The spread is not indiscriminate; the spread of perceived happiness, for instance, seems to travel primarily through friendships, although family ties also allow for some spread:
We can use these results to estimate what would happen to the happiness of the ego if the alter were "switched" from being unhappy to being happy—that is, if the alters "become" happy. "Nearby" friends (who live within a mile (1.6 km)) and who become happy increase the probability ego is happy by 25% (1% to 57%). "Distant" friends (who live more than a mile away) have no significant effect on ego. Among friends, we can distinguish additional possibilities; as each person was asked to name a friend, and not all of these nominations were reciprocated, we have ego perceived friends (denoted "friends"), "alter perceived friends" (alter named ego as a friend, but not vice versa) and "mutual friends" (ego and alter nominated each other). Nearby mutual friends have a stronger effect than nearby ego perceived friends; when they become happy it increases the probability ego will be happy by 63% (12% to 148%). In contrast, the influence of nearby alter perceived friends is much weaker and not significant (12%, –13% to 47%)....
We also found similar effects for other kinds of alters. Coresident spouses who become happy increase the probability their spouse is happy by 8% (0.2% to 16%), while non-coresident spouses have no significant effect. Nearby siblings who live within a mile (1.6 km) and become happy increase their sibling’s chance of happiness by 14% (1% to 28%), while distant siblings have no significant effect. Next door neighbours who become happy increase ego’s happiness by 34% (7% to 70%), while neighbours who live on the same block (within 25 metres) have no significant effect. All these relations indicate the importance of physical proximity, and the strong influence of neighbours suggests that the spread of happiness might depend more on frequent social contact than deep social connections. On the other hand, we found no effect of the happiness of coworkers on an ego, suggesting that the social context might moderate the flow of happiness from one person to another.
In any case, this type of study raises all sorts of interesting questions worth asking. Does intellectual excitement also follow the "three degrees rule"? (Randall Collins has suggested something like this, although I don't recall his specifying three degrees.) How about moral and religious habits? (Newman argued extensively that the primary source of religious conversion is personal example.) Does this pattern have a discernible effect on problems faced by women and minorities? And so on and so forth.
ADDED LATER: (1) Nicholas Christakis, one of the authors, has an online list of publications he's done in this area.
(2) Also, you should read this satirical criticism of jumping to conclusions on evidence like this, just in case you're inclined to make too much of a single study.
(3) And Richard points out this critical discussion in the comments.