NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

Mark Grinblatt, Matti Keloharju, Seppo Ikaheimo

NBER Working Paper No. 10226
Issued in January 2004
NBER Program(s):   AP

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.

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Document Object Identifier (DOI): 10.3386/w10226

 
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