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Peer Effects in the Demand for Housing Quality

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Abstract
Using detailed data on friendship networks within neighborhoods, we investigate the importance of social interactions in one's own residential neighborhood in the demand for housing quality. We find evidence consistent with the presence of peer effects, especially for households living in urban areas. Our findings are in line with the prediction of a model where conformity preferences are the key element underlying economic outcomes that involve interactions with peers. Key Words: Social Networks; Linear-In-Means Model; Spatial Autoregression Model; Social Norms JEL No. A14, C21, D85, R21, Z13

Suggested Citation

  • Eleonora Patacchini & Giuseppe Venanzoni, 2013. "Peer Effects in the Demand for Housing Quality," Center for Policy Research Working Papers 158, Center for Policy Research, Maxwell School, Syracuse University.
    • Handle: RePEc:max:cprwps:158
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    File URL: https://surface.syr.edu/cpr/391/
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Lenzi, Camilla, 2016. "Co-invention networks and inventive productivity in US citiesAuthor-Name: Breschi, Stefano," Journal of Urban Economics, Elsevier, vol. 92(C), pages 66-75.
    2. Chang, Zheng, 2018. "Information Barriers, Housing Searches, and Residential Satisfaction: A Study of Mainland China Students in Hong Kong," International Real Estate Review, Global Social Science Institute, vol. 21(3), pages 343-365.
    3. Gibbons, Steve & Overman, Henry G. & Patacchini, Eleonora, 2015. "Spatial Methods," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 115-168, Elsevier.
    4. Arduini, Tiziano & Iorio, Daniela & Patacchini, Eleonora, 2019. "Weight, reference points, and the onset of eating disorders," Journal of Health Economics, Elsevier, vol. 65(C), pages 170-188.
    5. Gaganis, Chrysovalantis & Hasan, Iftekhar & Pasiouras, Fotios, 2020. "National culture and housing credit," Journal of Empirical Finance, Elsevier, vol. 56(C), pages 19-41.
    6. Hans R.A. Koster & Jan Rouwendal, 2017. "Historic Amenities and Housing Externalities: Evidence from the Netherlands," Economic Journal, Royal Economic Society, vol. 127(605), pages 396-420, October.
    7. Anastasia Girshina & Thomas Y. Mathä & Michael Ziegelmeyer, 2019. "Peer effects in stock market participation: Evidence from immigration," BCL working papers 137, Central Bank of Luxembourg.
    8. Aronsson, Thomas & Mannberg, Andrea, 2015. "Relative consumption of housing: Marginal saving subsidies and income taxes as a second-best policy?," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 439-450.
    9. Zhang, Anquan & Ni, Pengfei & Ling, Chen, 2022. "Peer effects in rural housing demand: Evidence from China," China Economic Review, Elsevier, vol. 73(C).
    10. Chung, Bobby W., 2020. "Peers’ parents and educational attainment: The exposure effect," Labour Economics, Elsevier, vol. 64(C).
    11. Mota, Nuno & Patacchini, Eleonora & Rosenthal, Stuart S., 2016. "Neighborhood Effects, Peer Classification, and the Decision of Women to Work," IZA Discussion Papers 9985, Institute of Labor Economics (IZA).
    12. Yuan, Hang & Guan, Zhihua & Jiang, Changmin & Yang, Hangjun, 2023. "Peer effect in the construction of China’s high-speed rail stations: Empirical evidence from spatial econometric analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 173(C).
    13. Bruno Wichmann & Minjie Chen & Wiktor Adamowicz, 2016. "Social Networks and Choice Set Formation in Discrete Choice Models," Econometrics, MDPI, vol. 4(4), pages 1-26, October.
    14. Arthur Lewbel & Xi Qu & Xun Tang, 2024. "Ignoring measurement errors in social networks," The Econometrics Journal, Royal Economic Society, vol. 27(2), pages 171-187.

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    More about this item

    Keywords

    social networks; linear-in-means model; spatial autoregression model; social norms jel no. a14; c21; d85; r21; z13;
    All these keywords.

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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