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

49 Pages Posted: 13 Apr 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 - Department of Accounting and Finance; Aalto University

Multiple version iconThere are 2 versions of this paper

Date Written: September 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 and Ikaheimo, Seppo, Interpersonal Effects in Consumption: Evidence from the Automobile Purchases of Neighbors (September 2004). Available at SSRN: https://ssrn.com/abstract=513945

Mark Grinblatt (Contact Author)

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

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Yale University - International Center for Finance

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Matti Keloharju

Aalto University - School of Business ( email )

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Research Institute of Industrial Economics (IFN) ( email )

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Centre for Economic Policy Research (CEPR) ( email )

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Seppo Ikaheimo

Aalto University ( email )

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Helsinki, 00101
Finland

Aalto University - Department of Accounting and Finance ( email )

P.O. Box 21210
Aalto, 00076
Finland
+ 358 50 505 4990 (Phone)
+ 358 9 43 138 678 (Fax)

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