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Social Influence and Consumption: Evidence from the Automobile Purchases of Neighbors

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Author Info

  • Mark Grinblatt

    (The Anderson School at UCLA and NBER)

  • Matti Keloharju

    (Helsinki School of Economics and CEPR)

  • Seppo Ikäheimo

    (Helsinki School of Economics)

Abstract

This study analyzes the automobile purchase behavior of all residents of two Finnish provinces over several years. Using a comprehensive data set with location coordinates at the individual consumer level, it finds that the purchases of neighbors, particularly in the recent past and by those who are geographically most proximate, influence a consumer's purchases of automobiles. There is little evidence that emotional biases, like envy, account for the observed social influence on consumption. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 90 (2008)
Issue (Month): 4 (November)
Pages: 735-753

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Handle: RePEc:tpr:restat:v:90:y:2008:i:4:p:735-753

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Web page: http://mitpress.mit.edu/journals/

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Cited by:
  1. Hirshleifer, David & Teoh, Siew Hong, 2008. "Thought and Behavior Contagion in Capital Markets," MPRA Paper 9164, University Library of Munich, Germany.
  2. P. Baecke & D. Van Den Poel, 2012. "Improving Customer Acquisition Models by Incorporating Spatial Autocorrelation at Different Levels of Granularity," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium, Ghent University, Faculty of Economics and Business Administration 12/819, Ghent University, Faculty of Economics and Business Administration.
  3. Kaustia, Markku & Knüpfer, Samuli, 2012. "Peer performance and stock market entry," Journal of Financial Economics, Elsevier, Elsevier, vol. 104(2), pages 321-338.
  4. Kitamura, Hiroshi & Miyaoka, Akira & Sato, Misato, 2013. "Free entry, market diffusion, and social inefficiency with endogenously growing demand," Journal of the Japanese and International Economies, Elsevier, vol. 29(C), pages 98-116.
  5. Claire Dujardin & Florence Goffette-Nagot, 2010. "Neighborhood effects on unemployment ? A test à la Altonji," Post-Print, HAL halshs-00435119, HAL.
  6. Fullerton, Thomas M. & Juarez, David A. & Walke, Adam G., 2012. "Residential electricity consumption in Seattle," Energy Economics, Elsevier, Elsevier, vol. 34(5), pages 1693-1699.
  7. Helms, Andrew C., 2012. "Keeping up with the Joneses: Neighborhood effects in housing renovation," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 42(1-2), pages 303-313.

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