Smooth it Like the 'Joneses'? Estimating Peer-Group Effects in Intertemporal Consumption Choice  

Oleh:

Maurer, Jurgen ; Meier, Andre

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 118 no. 527 (Mar. 2008), page 454.
Topik: Estimation; Peer-Group Effects; Intertemporal Consumption Choice
Fulltext: 454.pdf (158.66KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: EE28.27 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

Recent theoretical contributions have suggested peer-group effects as a potential explanation for several puzzles in macroeconomics but their empirical relevance for intertemporal consumption choice is an open question. We derive an extension of the standard life-cycle model that allows for consumption externalities. In this framework, we propose a social multiplier approach to distinguish true externalities from merely correlated effects. Estimating our model using US panel data, we find strong predictable co-movement of household consumption within peer groups. Although much of this co-movement reflects correlated effects only, there is statistically significant evidence for moderate consumption externalities across several plausible peer-group specifications.

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