Neighborhood Effects on Speculative Behavior

40 Pages Posted: 31 Aug 2012 Last revised: 15 Sep 2017

See all articles by Todd Mitton

Todd Mitton

Brigham Young University - J. Willard and Alice S. Marriott School of Management

Keith Vorkink

Brigham Young University - J. Willard and Alice S. Marriott School of Management

Ian J. Wright

Goldman Sachs - Goldman Sachs

Date Written: September 13, 2017

Abstract

Speculative behavior plays a key role in numerous markets, but little is known about its causes. We test for neighborhood effects on speculative behavior using daily lottery sales data from 20 states in the U.S. In a sample of 160,000 retailers, lottery sales in a census block increase by $0.26, on average, for each $1 increase in neighboring blocks. We test whether this correlation is attributable to contextual effects, correlated effects, or endogenous effects. Our analysis suggests that social interaction is an important cause of speculative behavior.

JEL Classification: D10, G11, H20

Suggested Citation

Mitton, Todd and Vorkink, Keith and Wright, Ian J., Neighborhood Effects on Speculative Behavior (September 13, 2017). Available at SSRN: https://ssrn.com/abstract=2139106 or http://dx.doi.org/10.2139/ssrn.2139106

Todd Mitton

Brigham Young University - J. Willard and Alice S. Marriott School of Management ( email )

Provo, UT 84602
United States
801-422-1763 (Phone)

Keith Vorkink (Contact Author)

Brigham Young University - J. Willard and Alice S. Marriott School of Management ( email )

Provo, UT 84602
United States

Ian J. Wright

Goldman Sachs - Goldman Sachs ( email )

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