Interpersonal Effects in Consumption: Evidence from the Automobile Purchases of Neighbors

42 Pages Posted: 23 Jan 2004

See all articles by Mark Grinblatt

Mark Grinblatt

University of California, Los Angeles (UCLA) - Finance Area; Yale University - International Center for Finance; National Bureau of Economic Research (NBER)

Matti Keloharju

Aalto University - School of Business; Research Institute of Industrial Economics (IFN); Centre for Economic Policy Research (CEPR)

Seppo Ikaheimo

Aalto University

Multiple version iconThere are 2 versions of this paper

Date Written: January 2004

Abstract

This study analyzes the automobile purchase behavior of all residents of two Finnish provinces over several years. It finds that a consumer's purchases are strongly influenced by the purchases of his neighbors, particularly purchases in the recent past and by neighbors who are geographically most proximate. There is little evidence that emotional biases, like envy or an urge to conform, lie behind the interpersonal influence in automobile consumption. The most reasonable alternative explanation for these findings is some form of information sharing among neighbors.

Suggested Citation

Grinblatt, Mark and Keloharju, Matti and Ikaheimo, Seppo, Interpersonal Effects in Consumption: Evidence from the Automobile Purchases of Neighbors (January 2004). NBER Working Paper No. w10226. Available at SSRN: https://ssrn.com/abstract=486230

Mark Grinblatt (Contact Author)

University of California, Los Angeles (UCLA) - Finance Area ( email )

Los Angeles, CA 90095-1481
United States
310-825-1098 (Phone)
310-206-5455 (Fax)

Yale University - International Center for Finance

Box 208200
New Haven, CT 06520-8200
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Matti Keloharju

Aalto University - School of Business ( email )

P.O. Box 21210
AALTO, FI-00076
Finland
+358 40 353 8043 (Phone)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Seppo Ikaheimo

Aalto University ( email )

P.O. Box 21210
Helsinki, 00101
Finland

Register to save articles to
your library

Register

Paper statistics

Downloads
39
Abstract Views
1,385
PlumX Metrics