Article

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

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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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... The starting point of this research is the observation that peers play a signi…cant role in in ‡uencing consumption behavior of individuals. This evidence comes from a small but growing body of literature on neighborhood and peer e¤ects in consumption, mostly in developed countries (e.g., Grinblatt et al., 2008;Angelucci and De Giorgi, 2009;Kuhn et al., 2011;Moretti, 2011;Roth, 2015;De Giorgi et al., 2016). 1 What remains unclear is whether this is a universal social phenomenon or an artifact of a-uent market oriented lifestyle. 2 Also, the question of why peers matter in shaping consumption choices has received little attention in the existing literature. ...
... The second factor complicating identi…cation and estimation of peer in ‡uences is an omitted variables bias. As noted by Grinblatt et al. (2008), in the absence of a perfect set of controls, one cannot validate a peer in ‡uence on consumption by observing that a group of neighbors purchase similar baskets of goods (or spend similar amounts of resources on consumption). Inferences will be biased whenever there are group level unobservables that are correlated with consumption expenditure of all those belonging to the group (i.e., correlated unobservables). ...
... As noted previously, much of the existing research on peer in ‡uences in consumption focuses on developed countries. One of the earliest empirical studies in this literature is that by Grinblatt et al. (2008). Using Finnish data, they provide evidence of endogenous peer e¤ects in automobile purchases. ...
... rant. Far fewer see our sleepwear, what we have for breakfast at home, or the brand of toilet paper we buy. 2 Veblen termed status signaling via the acquisition and display of visible goods conspicuous consumption. 3 A number of studies have presented evidence about the relationship between status and the consumption of visible goods (Ravina, 2007;Grinblatt et. al. 2008;Charles et. al., 2009;Heffetz, 2011;Kuhn et al., 2011). However, there are several difficulties in identifying conspicuous consumption as a motivation for consuming visible goods. First, visibility is only one of many properties possessed by any given good that contribute to the observed demand for it. It is difficult to disentangle dema ...
... Income also tends to be correlated with various characteristics that confer social status through popular esteem, such as intelligence, education level, family background, profession, and political clout. Lastly, it is difficult to disentangle conspicuous consumption from social learning as factors that drive individuals with similar social status to make similar consumption decisions (Grinblatt et al., 2008). ...
... Since buying chocolate provides only private benefit to the person who purchased it, we are able to study conspicuous consumption without confounding factors of generosity and altruism, which are present in other studies. Further, since participants did not know the consumption decisions of others, our experiment isolates the effect of conspicuous consumption from social learning (Grinblatt et al., 2008). ...
Article
Some economists argue that consumption of publicly visible goods is driven by social status. Making a causal inference about this claim is difficult with observational data. We conduct an experiment in which we vary both whether a purchase of a physical product is publicly visible or kept private and whether the income used for purchase is linked to social status or randomly assigned. Making consumption choices visible leads to a large increase in demand when income is linked to status, but not otherwise. We investigate the characteristics that mediate this effect and estimate its impact on welfare.
... 6 First of all, CRM can be used to identify profitable customers that are most suitable for acquisition. 11 Next, direct marketing tools, such as direct mail and coupons, are used to attract these customers. 12 Once the customers are acquired the firm should focus on customer retention. ...
... Even with the best data mining techniques, the predictive performance of the CRM model will always be poor if the customer database falls short. 11 text analysis program is used to compile positive and negative emotionality indicators from call center emails. They indicated that incorporating these emotions in an extended RFM model helps to better identify potential churners. ...
... Several studies have already proven that spatial statistics can produce interesting insights in marketing [6][7][8][9][10][11][12]. However, only a limited number of studies use spatial information to improve the accuracy of a predictive CRM model. ...
... Potential adopters improve their understanding of an innovation by seeing it demonstrated or trialled (Young, 2009) which can lead to faster adoption rates (Rogers, 2003). This is significant and distinguishable from information exchange within closely related socioeconomic groups (Goetzke and Weinberger, 2012;Grinblatt et al., 2008;Heffetz, 2011). ...
... Within 31 different expenditure categories in the USA including clothing, jewellery, home furnishings and mobile phones, Heffetz (2011) found vehicles to be the second most visible to other people living in close proximity. People are more likely to own or purchase a certain type of car if people living around them have done so recently (Adjemian et al., 2010;Grinblatt et al., 2008;Mau et al., 2008). Although a strong neighbourhood effect is evident in both urban and rural communities (Goetzke and Weinberger, 2012;McShane et al., 2012;Yang and Allenby, 2003;Zhu and Chao, 2013), it can be stronger in rural areas with lower population density (Grinblatt et al., 2008;Shemesh and Zapatero, 2014). ...
... People are more likely to own or purchase a certain type of car if people living around them have done so recently (Adjemian et al., 2010;Grinblatt et al., 2008;Mau et al., 2008). Although a strong neighbourhood effect is evident in both urban and rural communities (Goetzke and Weinberger, 2012;McShane et al., 2012;Yang and Allenby, 2003;Zhu and Chao, 2013), it can be stronger in rural areas with lower population density (Grinblatt et al., 2008;Shemesh and Zapatero, 2014). ...
Article
Alternative fuel vehicle technologies are needed to mitigate rising greenhouse gas emissions from transport. Social influence is integral to the diffusion of private vehicles which are highly visible and fulfil practical as well as social functions. This paper provides the first meta-analysis of empirical studies which measure the strength of social influence on consumer vehicle choice. A systematic literature review identified 21 studies that examined three types of social influence: interpersonal communication; neighbourhood effect; and conformity with social norms. A random effects meta-analysis found a significant and small to moderate effect of social influence on vehicle choices (r = 0.241, p < 0.001). The overall effect size did not vary significantly between types of social influence nor between types of vehicle (conventional or alternative fuel). However, further analysis using meta-regression found that heterogeneity in social influence effect size across studies was explained by differences in countries' cultural receptiveness to normative influence. These findings have important implications for policy and modelling analysis of alternative fuel vehicle adoption, for which diffusion is both a socially and culturally-mediated process.
... To address this potential concern in the cases of accuracy of perceptions of past returns and of expectations for future returns, Table 4 reports estimates of Heckman regressions of absolute forecast or backcast errors, conditional on the respondent having chosen to form a financial circle. 34 The first-stage regression estimates are reported in columns (a), while the second-stage (forecast or backcast) regressions appear in columns (b), for selected covariates. 35 Table 2 shows that the key finding on absolute forecast errors, namely that social interaction variables play no role once backcast errors are controlled for, is robust to allowing for endogenous formation of the financial circle. ...
... Table 5 presents four bivariate probits. Even-numbered columns depict the choice of whether 34 As a further robustness exercise, Table A9 in the online appendix reports estimates from seemingly unrelated regression (SUR) estimation, where the decision to form a financial circle and errors in perceptions or expectations are allowed to be arbitrarily related, with similar results. 35 Table A3 in the online appendix reports the results for the full list of covariates. ...
Working Paper
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Household finances are confidential and discussions are limited to a subset of peers. We collect novel representative survey data to examine separately whether interactions with inner and outer social circles influence return perceptions, expectations, and exposure to a widely known financial instrument in a developed economy with multiple information sources. We find that a respondent’s connectedness, proxied by perceived prevalence of information or participation in the small financial circle, improves expectation accuracy indirectly, through boosting accuracy of perceived past returns; and influences stock participation and exposure not only by influencing expectations, but also directly.
... 5 And some recent microeconomic evidence suggests that consumption and debt might be shaped by local factors (Coibion et. al (2014), Grinblatt, Keloharju, and Ikaheimo (2008)). 6 However, there remains little direct household level evidence linking household consumption, debt and portfolio decisions, including occupational choice, to status motives driven by the variation in a household's income relative to its close neighbors. ...
... There is evidence that peer effects feature in important economic decisions, and these effects could also be a source of bias (Bertrand, Luttmer and Mullainanthan (1998), Grinblatt, Keloharju, and Ikaheimo (2008)). Households living in areas with more high status cars might also be induced to buy these cars, and to the extent that the percent of high status cars in the local area is correlated with relative household income, this type of peer effect could lead to a spurious association between relative income and status cars. ...
... SNI is a critical determinant of WTB (Hoyer et al., 2008). Grinblatt et al. (2008), for instance, analyzed the automobile purchasing behavior of Finnish consumers. The authors found a positive association between SNI and the purchase of automobiles. ...
... Although the influence of SNI on WTB differs in each one of the abovementioned contexts, the motive is identical (i.e. the desire to conform to group norms). In Grinblatt et al.'s (2008) study, consumers purchased the makes and models owned by their neighbors to show that they too could afford such cars. In Maher and Mady's (2010) study, however, consumers were reluctant to purchase the products made in the offending country because they wanted to demonstrate to their reference groups that they were not acting in defiance of their groups' norms. ...
Article
Purpose The purpose of this paper is to explore the effects of consumer animosity on conspicuous consumption in two research settings: Israel and Russia. The study also examines: the relationship between susceptibility to norm influence (SNI) and consumer animosity, whether SNI affects consumers’ willingness to buy (WTB) products from a country toward which they harbor animosity, and the relationship between consumer animosity and WTB in contexts differing in the level of animosity harbored toward a target country. Design/methodology/approach To probe generalizability, the hypothesized model was tested in two different contexts: Study 1 was conducted in Israel using the context of the Holocaust and Study 2 was conducted in Russia using the context of the recent political discord with the USA. A convenience sample of Israeli-Jewish (n=264) and Russian (n=259) consumers yielded a total of 523 questionnaires. Findings In both contexts, the results from the SPSS and AMOS analyses indicated a negative and significant relationship between consumer animosity and conspicuous consumption. Moreover, SNI was positively associated with consumer animosity. Finally, the study findings point to a negative association between consumer animosity and WTB, regardless of the level of animosity. Originality/value The research findings suggest that consumer animosity may be a stronger predictor for the consumption of conspicuous products than for the consumption of necessity goods.
... Finally, this study contributes to the literature on conspicuous consumption that refers to household behavior on consuming certain goods that have higher price tags but meet their desire to display higher social standing and self-worth (Veblen 1899;Zinkhan and Prenshaw 1994;Byrne 1999). In the conspicuous consumption literature, most analyses have used the (perceived) socioeconomic standing relative to the reference group, usually neighbors, to be the main driver of consumption (Grinblatt et al. 2008;Charles et al. 2009;Vissing-Jorgensen 2012;Georgarakos et al. 2014;Bricker et al. 2014;Carr and Jayadev 2015). There is also strong evidence on how awards could illustrate symbols of social standing and reputation (Frey 2006). ...
... According to the literature on conspicuous consumption, households consume certain goods that have higher price tags but meet their desire to display higher social standing and self-worth (Veblen 1899;Zinkhan and Prenshaw 1994;Byrne 1999). In this context, lower (perceived) socioeconomic status compared with peers or neighbors is a main driver of consumption primarily because of envy and status-seeking motivations (Grinblatt et al. 2008;Charles et al. 2009;Georgarakos et al. 2014;Bricker et al. 2014). ...
Article
Full-text available
Many residential projects that receive publicly recognized awards for their architectural design and are built alongside monotonous public housing in Singapore present a unique opportunity to analyze the economic spillovers of design awards in the multifamily residential context. The difference-in-differences approach is utilized to estimate the design award’s effects on market prices of nearby public housing. Analysis results show that prices fell by 2% for public housing units within a 300-m radius of award-winning residences and sold during the first year after awards were given. In contrast, neither actual completion of award-winning residences nor the completion of non-awarded condominiums with good design led to a significant price change. These results provide suggestive evidence that the dominating channel for negative economic spillovers is winning an award rather than congestion from new residential developments or good design itself. Furthermore, price reduction was significant only for newer public housing units with better design attributes compared to older ones. This suggests that the economic spillover of design awards is negative when surrounding housing units are potentially comparable and substitutional with award-winning residences and have a limited possibility for self-improvement through upgrades or redevelopment. A potential explanation is that envy based on the comparison with a neighboring residence receiving a publicly recognized design award may play an influential role in conspicuous housing consumption.
... Positive announcement effects associated with acquisitions are regarded as valueenhancing (Moeller, Schlingemann, and Stulz, 2004;Gaspar, Massa, and Matos, 2005). Innovation leaders' acquisitions are considered to convey more favorable signals when the acquisitions elicit positive stock market reactions, as in Kremer and Miguel (2007) and Grinblatt, Keloharju, and Ikäheimo (2008). ...
... The logistic regression result indicates a positive association between innovation leaders' outcomes and followers' completion probability. 6 We follow Kremer and Miguel (2007) and Grinblatt et al. (2008) and use the number of positive outcomes over the observation period to represent the degree of favorable signals conveyed by the actions of innovation leaders. We obtain similar results if we use the fraction of positive outcomes over the observation period. ...
Article
We examine how learning from observation of the acquisition outcomes of innovation leaders affects the acquisition decisions and performance of followers in an industry. Followers tend to increase both the probability of acquisition and the size of an acquisition when innovation leader acquisitions produce more favorable outcomes, and reduce both when innovation leader acquisitions suffer more unfavorable outcomes. Industry competition, environmental uncertainty, prior acquisition experience, geographic proximity, and managerial incentives are five important mechanisms that affect observational learning in acquisitions. Follower acquisitions perform better when innovation leaders’ acquisition outcomes convey more favorable signals, and more poorly when they convey more unfavorable signals. This article is protected by copyright. All rights reserved
... Peer influence occurs when people's opinions and behaviors are affected by peers, and is prevalent in large-scaled social networks, leading to social contagion through the paths of linked individuals. A large body of literature has documented the impact of peer influence on agents' economic decisions, including product consumption [4], [5]; technology adoption and innovation diffusion [6]- [11]; online content generation and diffusion [11]- [13]; use of social networking sites [14]; and so forth. ...
... More broadly, the paper is a contribution to the existing literature on envy, which includes work in a number of sciences ( Fliessbach et al., 2007;Takashi et al., 2009;Swencioncis & Fiske, 2014) and social psychology ( Buss et al., 1992;Parks, Rumble, & Posey 2002;Smith & Kim 2007;Van De Ven, Zeelenberg, & Pieters, 2010;Hill, DelPriore, & Vaughan, 2011;Lange & Crusius, 2015). Research by economists includes Varian (1974), Kirchsteiger (1994), Mui (1995), Feldman & Kirman (1974), Grinblatt, Keloharju & Ikaheimo (2008), Chen & Li (2009) and Winkelmann (2012). A related set of studies also examines the empirical association between dispositional envy and individual mental health outcomes. ...
Article
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Nearly 100 years ago, the philosopher and mathematician Bertrand Russell warned of the social dangers of widespread envy. One view of modern society is that it is systematically developing a set of institutions -- such as social media and new forms of advertising -- that make people feel inadequate and envious of others. If so, how might that be influencing the psychological health of our citizens? This paper reports the first large-scale longitudinal research into envy and its possible repercussions. The paper studies 18,000 randomly selected individuals over the years 2005, 2009, and 2013. Using measures of SF-36 mental health and psychological well-being, four main conclusions emerge. First, the young are especially susceptible. Levels of envy fall as people grow older. This longitudinal finding is consistent with a cross-sectional pattern noted recently by Nicole E. Henniger and Christine R. Harris, and with the theory of socioemotional regulation suggested by scholars such as Laura L. Carstensen. Second, using fixed-effects equations and prospective analysis, the analysis reveals that envy today is a powerful predictor of worse SF-36 mental health and well-being in the future. A change from the lowest to the highest level of envy, for example, is associated with a worsening of SF-36 mental health by approximately half a standard deviation (p < .001). Third, no evidence is found for the idea that envy acts as a useful motivator. Greater envy is associated with slower -- not higher -- growth of psychological well-being in the future. Nor is envy a predictor of later economic success. Fourth, the longitudinal decline of envy leaves unaltered a U-shaped age pattern of well-being from age 20 to age 70. These results are consistent with the idea that society should be concerned about institutions that stimulate large-scale envy.
... Social influence has been shown to play an important role in behavior at the individual-level, including behavior related to consumption (e.g., Goolsbee and Klenow, 2002), income and labor (e.g., Topa, 2001), education (e.g., Angrist and Lang, 2004), health (e.g., Trogdon et al., 2008;Ma et al., 2015), and crime (e.g., Glaeser et al., 1996). Recently, economists have become interested in the role of social influence in decisions with environmental ramifications such as vehicle purchases (Grinblatt et al., 2008), the adoption of solar panels (Bollinger and Gillingham, 2012;Graziano and Gillingham, 2015), energy conservation (Allcott, 2011;Delmas and Lessem, 2014), and the adoption of green products (Kahn and Vaughn, 2009). ...
Article
We investigate the role of social influence in the commute to work. Using instruments to address the endogeneity of commute decisions and a dataset of U.S. military commuters on 100 military bases over the period 2006 to 2013, we show that workplace peers positively influence one another's decisions to drive alone to work and carpool to work. All else equal, an increase in the fraction of peers who drive alone of 10 percentage points increases the probability of driving alone by 6.05 percentage points. An increase in the fraction of peers who carpool of 10 percentage points increases the probability of carpooling by 5.14 percentage points. To examine whether conventional measures of social status and seniority predict who exerts the strongest influence on others, we disaggregate the dataset into subgroups and identify which subgroups have the greatest influence and which are most susceptible to influence. Results show that in commute decisions, intra-group influence can be more important than inter-group influence. This suggests that workplace travel interventions that seek to shift employees away from driving alone or toward carpooling may be most effective if communicated by one's own peer group.
... Banerjee et al. (2013) consider a novel micro…nance program and replace the unconditional individual probability of participation by the individual probability of participa-tion conditional on individual information sourced from friends. Once informed, they …nd that an agent's decision to participate in the program is not signi…cantly in ‡uenced by the fraction of her friends participating, concluding that the in ‡uence of peer participation is mainly an information e¤ect.31 It is possible to construct an extreme interpretation of their …ndings that would be in con ‡ict with ours. ...
Technical Report
We design, field and exploit novel survey data, from a representative sample of the French population in December 2014 and May 2015 to provide insights on whether social interactions are informative for households' financial decisions. In particular, we examine the extent to which peers with whom respondents discuss financial matters are themselves informed about or participate in the stock market, and whether they encourage mindless imitation of perceived stock market participation. We provide a model in which purely informative social interactions influence both subjective expectations of future stock market returns and directly demand for investing in stocks, and find strong support for the presence of informative social interactions. How much a respondent's financial circle is informed about or participates in stockholding appears to influence perceptions of recent stock returns and, through them, expectations of future returns. Controlling for subjective expectations, both stock market participation and the conditional portfolio share are positively influenced by the extent to which the financial circle of a respondent is informed about or participating in the stock market. Alongside the informative social interactions of respondents with their financial circle, we also find some evidence of mindless imitation of stock market participation via their outer social circle. Our findings suggest that informative social interactions are significant and create a social multiplier for financial education and information, even though the potential for mindless imitation is also present.
... People rely on the opinion and behaviour of others around them to communicate not only the acceptability of owning particular vehicles but also to signal reliability and quality which is particularly relevant for vehicles with new fuel or body types (Adjemian et al., 2010;Gaker et al., 2010;Heutel and Muehlegger, 2010;Wiedmann et al., 2011). People especially rely on the opinion and behaviour of those within close social networks including friends, family, neighbours, and work colleagues (Adjemian et al., 2010;Aini et al., 2013;Axsen et al., 2013;Grinblatt et al., 2008;McShane et al., 2012). These social influences apply equally to purchases of conventional vehicles (CVs) and alternative fuel vehicles (AFVs) (Pettifor et al., 2017) Consumer choice is also shaped by broader social beliefs and value systems that prevail within a given culture. ...
Article
We present a unique and transparent approach for incorporating social influence effects into global integrated assessment models used to analyse climate change mitigation. We draw conceptually on Rogers (2003) diffusion of innovations, introducing heterogeneous and interconnected consumers who vary in their aversion to new technologies. Focussing on vehicle choice, we conduct novel empirical research to parameterise consumer risk aversion and how this is shaped by social and cultural influences. We find robust evidence for social influence effects, and variation between countries as a function of cultural differences. We then formulate an approach to modelling social influence which is implementable in both simulation and optimisation-type models. We use two global integrated assessment models (IMAGE and MESSAGE) to analyse four scenarios that introduce social influence and cultural differences between regions. These scenarios allow us to explore the interactions between consumer preferences and social influence. We find that incorporating social influence effects into global models accelerates the early deployment of electric vehicles and stimulates more widespread deployment across adopter groups. Incorporating cultural variation leads to significant differences in deployment between culturally divergent regions such as the USA and China. Our analysis significantly extends the ability of global integrated assessment models to provide policy-relevant analysis grounded in real world processes.
... A possible explanation can be the social influence in sports clubs. Previous studies have shown that social influence has a significant effect on consumption [66,67]. For example, the purchase of a sports watch by a fellow club member makes it more likely that another sports club member will purchase the same brand and model within a reasonable amount of time. ...
Article
Full-text available
Individual and unorganized sports with a health-related focus, such as recreational running, have grown extensively in the last decade. Consistent with this development, there has been an exponential increase in the availability and use of electronic monitoring devices such as smartphone applications (apps) and sports watches. These electronic devices could provide support and monitoring for unorganized runners, who have no access to professional trainers and coaches. The purpose of this paper is to gain insight into the characteristics of event runners who use running-related apps and sports watches. This knowledge is useful from research, design, and marketing perspectives to adequately address unorganized runners’ needs, and to support them in healthy and sustainable running through personalized technology. Data used in this study are drawn from the standardized online Eindhoven Running Survey 2014 (ERS14). In total, 2,172 participants in the Half Marathon Eindhoven 2014 completed the questionnaire (a response rate of 40.0%). Binary logistic regressions were used to analyze the impact of socio-demographic variables, running-related variables, and psychographic characteristics on the use of running-related apps and sports watches. Next, consumer profiles were identified. The results indicate that the use of monitoring devices is affected by socio-demographics as well as sports-related and psychographic variables, and this relationship depends on the type of monitoring device. Therefore, distinctive consumer profiles have been developed to provide a tool for designers and manufacturers of electronic running-related devices to better target (unorganized) runners’ needs through personalized and differentiated approaches. Apps are more likely to be used by younger, less experienced and involved runners. Hence, apps have the potential to target this group of novice, less trained, and unorganized runners. In contrast, sports watches are more likely to be used by a different group of runners, older and more experienced runners with higher involvement. Although apps and sports watches may potentially promote and stimulate sports participation, these electronic devices do require a more differentiated approach to target specific needs of runners. Considerable efforts in terms of personalization and tailoring have to be made to develop the full potential of these electronic devices as drivers for healthy and sustainable sports participation.
... Relying on the neighborhood-fixed effects, I am implicitly making the assumption that properties located in the same neighborhood sold in the same year are comparable in all characteristics, observable and unobservable, other than their exposure to nearby restaurants ( Bayer et al., 2008 ;Grinblatt et al., 2008 ;Campbell et al., 2011 ). ...
Article
The possibility that local consumption amenities provided by bars, restaurants, and other retail services improve neighborhood or city attractiveness has received increasing attention in the literature. Empirical research thus far has focused on the number of establishments in an area. This paper proposes and tests a method for differentiating consumption amenities along a quality dimension, based on either consumer ratings or price estimates from Yelp.com. Appealing to the implicit market model of Rosen (1974), consumption amenity is capitalized in the value of nearby housing. The results demonstrate that both the quantity and quality aspects of consumption amenities matter, and that consumer ratings are more informative about unobservable restaurant amenity than price estimates. Furthermore, comparisons between the results for the pre- and post-Yelp periods show that such capitalization differentials are more significant when information on quality is readily available to and widely used by the public. The method used in this paper to measure the quality of consumption amenities could be applied to other private retail businesses or even local public goods.
... Wilton et al., 2011 ), vehicle ownership (e.g. Grinblatt et al., 2008 ), electric vehicle adoption (e.g. Axsen and Kurani, 2012 ), pedestrian safety (e.g. ...
Article
The current state-of-the-art in social influence models of travel behavior is conformity models with direct benefit social influence effects; indirect effects have seen limited development. This paper presents a latent class discrete choice model of an indirect informational conformity hypothesis. Class membership depends on the proportion of group members who adopt a behavior. Membership into the “more informed” class causes taste variation in those individuals thus making adoption more attractive. Equilibrium properties are derived for the informational conformity model showing the possibility of multiple equilibria but under different conditions than the direct-benefit formulations. Social influence elasticity is computed for both models types and non-linear elasticity behavior is represented. Additionally, a two-stage control function is developed to obtain consistent parameter estimates in the presence of an endogenous class membership model covariate that is correlated with choice utility unobservables. The modeling framework is applied in a case study on social influence for bicycle ownership in the United States. Results showed that “more informed” households had a greater chance of owning a bike due to taste variation. These households were less sensitive to smaller home footprints and limited incomes. The behavioral hypothesis of positive preference change due to information transfer was confirmed. Observed ownership share closely matched predicted local-level equilibrium in some metropolitan areas, but the model was unable to fully achieve the expected prediction rates within confidence intervals. The elasticity of social influence was found to range locally from about 0.5% to 1.0%.
... To quantify the degree of sociality between genotypes, we relied on the nearest neighbor index (Clark and Evans 1954). This index and similar measures have been instrumental in measuring social coherence in numerous enlightening studies of sociality in many species (White and Chapman 1994;Fischhoff et al. 2007;Evans and Harris 2008;Fero and Moore 2008;Grinblatt et al. 2008;Buijs et al. 2011). The main advantage of directly quantifying a major characteristic of the social group is that it reflects the outcome of social interactions among its members, which, in our study, were genetically identical. ...
Article
The growing body of literature on social behavior in fruit flies opens up exciting opportunities for addressing an unresolved issue involving the degree of correlation between behavioral traits in larvae and adults. Although the prevailing adaptive decoupling hypothesis states that metamorphosis is associated with the disruption of genetic correlations between juvenile and adult traits, 2 alternative hypotheses are that, sometimes, a positive correlation may be adaptive, and that, often, the underlying genetic architecture will prevent perfect decoupling. We used lines of the Drosophila Genetic Reference Panel to quantify the degree of sociality in larval and adult fruit flies and then examined the correlation between the life stages. To verify that our social behavior scores did not merely reflect variation in activity levels, we also quantified larval and adult activity. Although we found significant variation in social behavior and activity among larvae and adults, both traits were decoupled between larvae and adults. Social behavior and activity were not positively correlated within each life stage either. Although our results agree with the adaptive decoupling hypothesis, both ultimate and proximate considerations suggest that, generally, we should expect the degree of decoupling to vary between species and traits.
... For instance, Bagwell and Bernheim (1996) examine under what circumstances 'Veblen effects' arise from the desire to achieve social status by signalling wealth through conspicuous consumption; Leibenstein (1950) and Corneo and Jeanne (1997) show how signalling value depends on whether consumer behaviour is characterised by snobbism or conformism. Other studies provide empirical evidence on how different factors affect conspicuous consumption such as status (Chao and Schor, 1998), globalisation (Dholakia and Talukdar, 2004), mating motivation and sexual signaling (Griskevicius et al., 2007;Sundie et al., 2011), geographical proximity (Grinblatt et al., 2008), race (Charles et al., 2009), self-esteem (Truong and McCol, 2011), social class (Khamis et al., 2012) and spirituality (Stillman et al., 2012). ...
Article
This study empirically explores the following issue: Does corruption fuel conspicuous consumption? It examines the existence and magnitude of any potential corruption-effect on conspicuous consumption expenditure. Regression analyses of an unbalanced panel data for 20 OECD countries between 2004 and 2010 indicate that luxury car sales are higher by 191 per cent in a country with a high perceived corruption level, for example, CPI score of 4.5, as compared to a country with a low perceived corruption level, for example, CPI score of 9.0, ceteris paribus. JEL Classification: D12; D73
... Second, learning about route 135 and mode choice 136,137 have been documented as changing transport decisions. Third, peer effects exist for both car purchases 138 and solar panel uptake 139 : a policy that makes a low-carbon good more attractive can change preferences by influencing the social norm. Fourth, in an experimental setting, carbon pricing can also change preferences by crowding out citizens' intrinsic motivation to choose low-carbon products as documented 140 . ...
Article
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Mitigation solutions are often evaluated in terms of costs and greenhouse gas reduction potentials, missing out on the consideration of direct effects on human well-being. Here, we systematically assess the mitigation potential of demand-side options categorized into avoid, shift and improve, and their human well-being links. We show that these options, bridging socio-behavioural, infrastructural and technological domains, can reduce counterfactual sectoral emissions by 40–80% in end-use sectors. Based on expert judgement and an extensive literature database, we evaluate 306 combinations of well-being outcomes and demand-side options, finding largely beneficial effects in improvement in well-being (79% positive, 18% neutral and 3% negative), even though we find low confidence on the social dimensions of well-being. Implementing such nuanced solutions is based axiomatically on an understanding of malleable rather than fixed preferences, and procedurally on changing infrastructures and choice architectures. Results demonstrate the high mitigation potential of demand-side mitigation options that are synergistic with well-being. Evaluation of mitigation actions often focuses on cost and overlooks the direct effects on well-being. This work shows demand-side measures have large mitigation potential and beneficial effects on well-being outcomes.
... We suspect that this distinction (negative-zero) would drive the existence of a negative effect of CSA information for the former, but a null effect for the latter. Moreover, there may be other ways for customers to reduce uncertainty regarding product fit, such as looking to role models, expert opinions, or geographic and/or group membership (Godes and Ofek 2004, Bell and Song 2007, Grinblatt et al. 2008, Duflo and Saez 2003. Inclusion of such information may potentially lead to somewhat different interactions. ...
Article
Most new-product frameworks in marketing and economics, as well as lay beliefs and practices, hold that the larger the stock of adoption of a new product, the greater the likelihood of additional adoption. Less is known about the underlying mechanisms as well as the conditions under which this central assumption holds. We use a series of field and consequential choice experiments to demonstrate the existence of nonpositive and even negative effects of large adoption stock information on the likelihood of subsequent adoption. The results highlight the degree of homophily with the adopting stock as well as the level of customer uncertainty as key characteristics determining the nature of the effect of stock information. In particular, information about a large existing adoption stock generates a positive effect on adoption only under moderate customer uncertainty combined with sufficient homophily; in other levels of uncertainty and/or homophily we find effects ranging from null to negative. This is the first direct test and demonstration of the intricate role of information about a large stock of adoption in the new product diffusion process, and it carries direct implications for marketers.
... Over and above personal characteristics, living in socio-economically disadvantaged immediate neighbourhoods increases the likelihood of school drop-out (ibid., p. 6ff) – a higher proportion of vocationally trained neighbours will encourage young people to stay in school and better their employment prospects. A study that is free of concerns regarding possible boundary effects has been undertaken by Grinblatt et al. (2004). Focus is on the impact of car purchases by neighbours on own car purchases. ...
Thesis
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A neighbourhood effect is commonly defined as an impact on people’s socio-economic outcomes that can be attributed to differences in the neighbourhood context. Neighbourhood effects have received increasing attention in the last decade from social researchers. However, many recent reviews of the empirical literature on neighbourhood effects reach the conclusion that no consensus has been reached on whether neighbourhood effects exist, or on which neighbourhood contexts produce which outcomes, which causal relationships are at work, or which groups are affected most. The empirical identification of neighbourhood effects is impeded both by theoretical and methodological challenges and, more importantly, lack of data. Neighbourhood effects studies aim to explain characteristics or behaviours of individuals through the neighbourhood context and assume that the populations of small geographical entities are highly homogeneous and that the areas’ characteristics can therefore be used to explain individual-level outcomes. Moreover, it is assumed that spatial proximity and social similarity leads people to become even more similar to each other. However, once we allow the individual’s behaviour to be influenced by the context we have to acknowledge that the individual does at the same time influence the context. By choosing the neighbourhoods in which they live, people also actively seek the contexts that will influence them. It is analytically and methodologically difficult to disentangle these effects. A further problem in the identification of neighbourhood effects is that of defining the relevant contexts, both in terms of the boundaries of the spatial units and in terms of the characteristics of the areas. Which contexts matter for which outcomes? Are ‘neighbours’ just the people in the adjacent homes, or everyone in the same town? Can neighbourhood effects meaningfully be established when we consider that people are becoming increasingly mobile and that they are confronted with a number of different local and social contexts? Even if the neighbourhood effects research could provide sufficiently good answers to these questions, it would still be difficult to find the kind of data needed to investigate the matter empirically. In the German case, it has been the lack of data that has impeded neighbourhood effects studies. It is extremely difficult and costly for individual researchers to get data describing people’s neighbourhoods. In contrast to most countries, Germany does not collect the population census data traditionally used by neighbourhood effects researchers to establish the neighbourhood context of respondents to large-scale nationally representative surveys. In Germany, the last census was collected in 1987 (East Germany: 1981). Data protection laws furthermore prohibit the disclosure of most geographically referenced data that might otherwise be available. As a result, there are only a handful of case studies for selected German cities that investigate the possible operation of neighbourhood effects (Hamburg: Alisch and Dangschat (1993), Cologne: Friedrichs (1998), Berlin: Häußermann and Kapphan (1999)). Most of the empirical evidence on neighbourhood effects is anecdotal and does not allow causal inference. The methodological design of the studies neither allowed researchers to look at a control group (for instance, poor people living in an affluent neighbourhood) nor to follow people over time as they move to other neighbourhoods or as their neighbourhoods undergo changes. The cornerstone for representative and longitudinal neighbourhood effects studies in Germany was laid when it became possible to match data of the German Socio-economic Panel Study (SOEP) with data at the zip-code level. Geographically referenced data at this scale have been obtained from a number of Statistical Offices of German cities. In addition, the data pools of micro-marketers offer a wide-range of qualitative neighbourhood indicators. Following strict data protection measures, select waves of SOEP have been matched on the basis of the study’s sensitive address records with a selection of these indicators. The point at which this was undertaken was the starting point for the research presented in this doctoral thesis. This study starts with an extensive review of theoretical and empirical work on neighbourhood effects (Chapter 2). It re-examines first theoretical and then empirical research from the disciplines of economics and sociology. There have been a number of recent reviews of neighbourhood effects studies (for instance Dietz 2002; Sampson, Morenoff et al. 2002; Durlauf 2003) and we may argue that there is no need to provide yet another one. However, the economics and sociology literature proved to overlap only to a minor extent and the studies offer fairly distinct insights into neighbourhood effects. One contribution of this thesis is to bring these schools of thought together. Comparing sociological and economic theories of neighbourhood effects, we find that the former have a tendency to focus on just parts of the broader picture. We look at the three most prominent models proposed in sociology – ‘contagion models’, ‘collective socialisation models’, and ‘institutional models’ – which are drawn upon to explain negative effects of living in neighbourhoods with a higher population of socio-economically disadvantaged people. A fourth model, the relative deprivation model, on the other hand, is used to explain positive effects of living in neighbourhoods with poor aggregate characteristics. All four models, however, could potentially also explain the opposite direction of effects. The strength of the economic theories – ‘interactions-based model’ and ‘models with local and global interactions’ in particular – is that they identify the conditions under which disadvantaged and advantaged neighbourhoods may or may not have negative effects on individual-level outcomes. The review of empirical studies, which follows the discussion of neighbourhood effects theories, shows that most empirical studies do not set out to test any of the propositions made by theorists. We re-examine sociological and economic studies that draw on a wide range of methodologies, including ethnographical, experimental and quantitative studies in both fields. European studies are taken into account where possible given the fact that recent reviews of neighbourhood effects studies have tended to overlook the European research. This thesis adds to the literature on neighbourhood effects by testing empirically whether people’s life satisfaction depends on their relative income position in the neighbourhood (Chapter 3). From the perspective of neighbourhood effects research this is an empirical test of relative deprivation theory, which posits that people are unhappier the better off their neighbours are. It has already been shown that people’s own income and others’ incomes matter for life satisfaction (e.g., Clark and Oswald 1996; Ferrer-i-Carbonell 2005). This makes a proof of the existence of the effect per se redundant, allowing us to focus on the identification of the particular context effect of neighbours’ income on life satisfaction. From the perspective of happiness research, the research presented in Chapter 3 is a test of whether or not the so-called ‘relative income’ hypothesis also holds when the reference group concerned is one’s neighbours. We use a unique dataset for these analyses – the 1994 and 1999 waves of the SOEP matched with neighbourhood indicators at the German zip-code level (roughly 4,000 households). This way we know for every respondent of the SOEP how well off they are and also how well off the people in their local environment are. The richness of the dataset allows us to control extensively for other characteristics of individuals, their families and their neighbours and to formulate more sophisticated hypotheses about possible routes for the comparison effect to operate. In addition, the longitudinal structure of both our neighbourhood context dataset and the SOEP allows us to control for unobserved heterogeneity at the neighbourhood and at the individual level. The empirical results presented in Chapter 3 suggest that there are sizeable neighbourhood effects on people’s life satisfaction: People living in small communities, self-owned property and in proximity to facilities that serve recreational purposes are happier than others. However, people in Germany are not unhappier the more income their neighbours have, as relative deprivation theory predicts, but – if anything - in fact happier. We find positive effects of neighbourhood income on happiness in all cross-sectional models and this is robust to a number of robustness tests, including adding in more controls for neighbourhood quality, changing the outcome variable, and interacting neighbourhood income with indicators that proxy the extent to which individuals may be assumed to interact with their neighbours. The impact of neighbours’ income on happiness is not highly statistically significant. In fact, it is only statistically significant in 1999 and borderline statistically significant in most models. But the neighbourhood income effect does not turn negative. The only negative effect of neighbourhood income on happiness we identify is for individuals with young children in the household. For these it appears to be a struggle to “keep up with the Schmidts” . Do we have to conclude from these findings that the predictions of the relative deprivation theory are wrong? Or are there other reasons that may explain why we do not identify a negative comparison effect? It is a common critique against neighbourhood effects research that it uses statistical constructs of neighbourhood that are too big and too crudely delineated to satisfy any more sophisticated definition of a neighbourhood, i.e., as a physical and social space. The scale at which we operationalise ‘neighbourhood’ is the smallest geographical entity that has ever been taken to establish the local context in German research. However, the German zip-code areas may be too large to detect the particular social comparison effect that we try to identify. During the course of this research, more micro-geographical data at different scales of neighbourhood became available, facilitating empirical analyses that would not have been possible at the start of this project. In addition to indicators of neighbourhood income at the zip-code level, indicators that apply the same income definition became available at two much more local scales, i.e., the market-cell level and the street-section level. This allows us to investigate systematically in Chapter 4 whether the social comparison effect operates at smaller scales of neighbourhood and also to test whether critiques that have been brought up against the use of large, statistically defined neighbourhood units are confirmed by the empirical evidence. We look at whether larger neighbourhood units confound heterogeneity of the population in the neighbourhoods, and re-estimate models used in Chapter 3 including neighbourhood incomes at three different scales. The majority of the results are the same whichever neighbourhood scale the reference income is measured at, and at the smaller geographic scales the effects are statistically significant. People in Germany are happier the more income their neighbours have, and we only find negative effects for individuals with young children in the household. For this group of the population we find that the neighbourhood income effect is more adverse when measured at the zip-code level than at the more immediate neighbourhood scales. We then address the critique that neighbourhood effects research operates with too poor a conceptualisation of neighbourhood by testing whether our neighbourhood effects are the same when we restrict the sample to individuals for whom we may assume that our neighbourhood units are not merely physical but also social spaces. The neighbourhood income effects remain positive but, for this smaller sample, they turn statistically insignificant. It is possible that neighbourhood income effects operate at multiple scales simultaneously. At the larger geographical scale, the prosperity in the neighbourhood may proxy better employment prospects, which may translate into greater happiness, while the comparison effect may only operate at the very local level. We show that not controlling for these area effects at larger scales biases the coefficients on our more locally defined neighbourhood characteristics. We find that the income in the market cell (corresponding to the average income of approx. 400 households around a person’s home) has the biggest influence on happiness, and is positive. At this scales of neighbourhood, the size of the coefficient is least affected by omission of neighbourhood characteristics at the other scales of neighbourhood. In these models, a number of neighbourhood income effects turn negative. However, the negative effects are not statistically significant. Perhaps close neighbours do not matter after all. This would be in line with the empirical result that we do not identify a negative comparison effect of the closest neighbours, while there are sizeable effects of higher prosperity in wider areas. The neighbourhood used to be considered the place where people work, where family and relatives live, and where friends are found. With increasing modernisation, however, people have become less dependent on their immediate local environment. They venture out into other places. Jobs, shops and places for recreation are outside peoples’ neighbourhoods. Access to public transportation and telecommunications make it possible to maintain contacts to like-minded people irrespective of where they live. Increasingly, when people perceive their prospects in the area as poor, they move away, even from family and friends. Greater mobility means that people are influenced not just by their neighbourhood but also by other contexts. This undermines the neighbourhood context hypothesis. The close neighbourhood may have lost its importance. In Chapter 5 we investigate empirically whether it may indeed be true that greater mobility is associated with close neighbours becoming less important. We focus on three different types of mobility that have been proposed to negatively impact on neighbourliness, namely residential mobility, access to modes of public and private transport, and changes in the availability of modern communications technologies. Our proxy for how much neighbours matter is the SOEP respondents’ accounts of how often they visit with their neighbours. In comparison, we look at the strength of people’s ties with their families and the sensitivity thereof to changes in mobility. Residential mobility, so the argument goes, increases the relative costs of investing in and maintaining links to people in the neighbourhood. Conversely, residentially mobile people have been suggested to maintain closer links to their family and relatives, i.e., the people who have been permanent companions and to whom strong emotional ties exist. Greater physical mobility means that people can more easily cover distances to reach people and places outside the neighbourhood. Since many people do not have family members living nearby, access to train services or their own car makes it possible to visit family members. Yet Internet use – dubbed virtual mobility – takes time that could be used to do other things. This in particular may have changed people’s inclination to interact with others face-to-face, not only with neighbours but also with family (or friends). It is a multifaceted tool which offers many types of activities and has an addictive potential. Its use has become less expensive over time as prices for personal computers have dropped and more Internet providers have entered the market. The Internet may be the community of the future as local communities lose their significance. The kind of data needed to empirically investigate a complex matter like this is not readily available in any single wave of SOEP (or in fact in any other social survey). Consecutive waves of the survey were pooled and matched with micro-marketing data, ensuring that people did not change neighbourhoods between the surveys – otherwise neighbourhood characteristics, accounts of social interactions with neighbours and mobility portfolios would not refer to the same place. The empirical analyses show increases in all forms of mobility in the decade from 1994 to 2004. Virtual mobility has entered into people’s lives at an immense pace, while residential mobility and physical mobility have increased more gradually. Parallel to this the incidence and frequency of social interactions with neighbours has declined, and we show that this is negatively associated with residential mobility, access to transport and Internet use. In contrast, the incidence and frequency of visits with family has remained constant over time. We show that family visits are not associated with changes in access to modes of transport, and that the correlations with residential and virtual mobility are in opposite directions. Greater residential mobility is correlated with more family visits and virtual mobility appears to weaken family ties as well as neighbourhood ties. Our multivariate analyses for 1999 and 2004 confirm these results. We test for a number of alternative explanations why mobility may be associated with declines in visits with neighbours. For instance, we test whether people’s decisions to visit neighbours or family may be driven by personal preferences rather than mobility portfolios by restricting the sample to individuals who we may assume not to have chosen their neighbourhood based on personal preferences (young people living with their parents), by interacting mobility effects with personal characteristics that suggest a particular inclination toward mobility and that may be correlated with people’s sociability, and also by controlling for unobserved heterogeneity. The effects of residential and virtual mobility are robust to these alternative explanations and we do not find effects of physical mobility. While residential mobility appears to have a trade-off effect on visiting with neighbours to the benefit of visiting with family, Internet use undermines sociability with neighbours and family. The negative effect of Internet use on people’s sociability in the real world may not continue, however, since most people are already using the Internet and the magnitude of the effect was much smaller in 2004 than in 1999. Overall, our results show that social contacts with neighbours are more volatile than family ties to changes in people’s mobility. With further increases in mobility, close neighbours may become less significant but even in a mobile society such as that of Germany in 2004, the incidence of visits with neighbours is sizeable and not close to zero – in contrast to the frequent assertion in the literature that the neighbourhood does not matter. The neighbourhood does matter – the research presented in this thesis documents this using the German example. It may not matter in the way that neighbourhood effects researchers expected and some effects prove to be difficult to identify even when very local and very timely data are used (as is the case here). Studying neighbourhoods is a very inspiring subject and the research presented in this thesis cannot necessarily cover all aspects. Chapter 6 summarises the main conclusions of this research and points out avenues that may be taken in the future to further understand how neighbourhoods affect people’s lives.
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... Our line of argumentation is embedded in the general literature on the role of proximity for peer effects, communication patterns, and knowledge flows (e.g., Bulte and Moenaert 1998;Glaeser and Sacerdote 2000;Grinblatt et al. 2008;Bandiera et al. 2010;Nanda and Sorenson 2010). There is also a burgeoning strand of literature investigating social network formation in the university context (e.g., Sacerdote 2001;Zimmerman 2003;Mayer and Puller 2008;Marmaros and Sacerdote 2006). ...
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... These studies have found that the income distribution has a relatively small e↵ect on visible spending. Other studies have started to shed light on important issues such as the extent to which di↵erent goods and services are visible to peers (Solnick and Hemenway, 2005), how the visibility of goods a↵ects income elasticities (He↵etz, 2011;Roth, 2014), how geographical proximity plays a role in visible spending (Grinblatt et al., 2008) and how household spending on visible goods is a↵ected by business cycles (Kamakura and Du, 2012). ...
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Using South African household expenditure data, we analyze how the spending of a household on visible goods, such as jewellery and clothes, depends on the distribution of income within its social group. We find that this spending is positively correlated with the share of peers who posses a similar income level to the household , what we dub the 'local income share'. Moreover, we find that the spending of a household on visible goods is positively correlated with the average income of peers that are poorer than this household. We interpret this as evidence for cascade effects through which income changes among the poorest in the social group can trigger adjustments in the visible spending patterns of the wealthy. In line with previous research (Charles et al., 2009), we also find that visible spending of a household is negatively correlated with the average income of its social group. We present a simple model of status competition based on Hopkins and Kornienko (2004) that synthesizes these effects and can account for our results.
... Moreover, even apart from considerations of marketing and product availability, there is substantial evidence that there are social effects of consumption decisions that will, in aggregate, multiply the effect of individual choices. Social scientists have identified mechanisms through which conspicuous or visible consumption choices influence the choices of peers (Grinblatt et al. 2008). These effects are especially pronounced for choices where consumers are uncertain, and thus make consumption decisions by Bfollowing^peers (Banerjee 1992;Bikhchandani et al. 1992). ...
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I. The nature of the problem, 183. — II. Functional and nonfunctional demand, 188. — III. The bandwagon effect, 190. — IV. The snob effect, 199. — V. The Veblen effect, 202. — VI. Mixed effects, 205. — VII. Conclusion, 206.
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A model of social distance is presented that is useful for understanding social decisions. An example is constructed of class stability. Agents who are initially close interact strongly while those who are socially distant have little interaction. In this example, inherited social position, which may be interpreted as social class, plays a dominant role. The relevance of this model to social decisions, such as the choice of educational attainment and childbearing, is discussed in the context of specific ethnographic examples. Class position may play a dominant role in these decisions.
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This paper supposes an individual cares about his/her own wealth not only directly but also via the relative standing that this wealth induces. The implications for risk-taking are investigated in particular. Such a model provides a natural explanation of the "concave-convex-concave" utility described by M. Friedman and L. Savage (1948). However, there are a number of key differences between the present model and any model based on own wealth alone. For example, an equilibrium wealth distribution here may have a middle class. Further, the status interaction involves an externality and an equilibrium wealth distribution may be Pareto inefficient. Copyright 1992 by The Econometric Society.
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I analyse a model that explicitly incorporates local interactions and allows agents to exchange information about job openings within their social networks. Agents are more likely to be employed if their social contacts are also employed. The model generates a stationary distribution of unemployment that exhibits positive spatial correlations. I estimate the model via an indirect inference procedure, using Census Tract data for Chicago. I find a significantly positive amount of social interactions across neighbouring tracts. The local spillovers are stronger for areas with less educated workers and higher fractions of minorities. Furthermore, they are shaped by ethnic dividing lines and neighbourhood boundaries.
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If individuals care about their status, defined as their rank in the distribution of consumption of one "positional" good, then the consumer's problem is strategic as her utility depends on the consumption choices of others. In the symmetric Nash equilibrium, each individual spends an inefficiently high amount on the status good. Using techniques from auction theory, we analyze the effects of exogenous changes in the distribution of income. In a richer society, almost all individuals spend more on conspicuous consumption, and individual utility is lower at each income level. In a more equal society, the poor are worse off.
The Theory of the Leisure Class. An Economic Study of Institutions 1899 (original publication date), Random House
  • Thorstein Veblen
Veblen, Thorstein. " The Theory of the Leisure Class. An Economic Study of Institutions. " 1899 (original publication date), Random House, 1931, tenth printing.
How Do Friendships Form? Dartmouth College working paper. Morgenstern, Oskar Demand Theory Reconsidered
  • David Marmaros
  • Bruce Sacerdote
Marmaros, David and Sacerdote, Bruce. " How Do Friendships Form? " 2004, Dartmouth College working paper. Morgenstern, Oskar. " Demand Theory Reconsidered. " Quarterly Journal of Economics, February 1948, 62(2), pp. 165-201.
Consumer Behavior. Buying, Having, and Being The Development of Utility Theory. II
  • Michael R Solomon
Solomon, Michael R. " Consumer Behavior. Buying, Having, and Being. " Prentice Hall, New Jersey, 1999, fourth edition. Stigler, George. " The Development of Utility Theory. II. " Journal of Political Economy, October 1950, 58(5), pp. 373-396.