Available online at www.sciencedirect.com

Procedia Environmental Sciences 17 (2013) 485 – 493

The 3rd International Conference on Sustainable Future for Human Security
SUSTAIN 2012

Effects of peer influence, satisfaction and regret on Car
Purchase Desire
Prawira Fajarindra Belgiawan*, Jan-Dirk Schmöcker, Satoshi FujiiaKyoto University, Katsura Campus, Kyoto 615-8540, Japan

Abstract
Car ownership levels are increasing rapidly in developing countries, leading to unsustainable developments.
Following previous research, we suggest that peer influences are important determinants of desires to purchase cars.
Using data from 134 undergraduate students who own a car from Bandung, Indonesia, this study constructs throughFriends, Commercial, Siblings and Parents. These four factors, along with the degree of satisfaction and regret of, are used in correlation analysis to determine their correlations with the desire topurchase a different car. Our results suggest that the influence of siblings is a significant determinant. We discuss that
this might highlight the importance of peers in car purchase decision.
© 20132012 The Authors.
Authors. PublishedPublishedby
byElsevier
ElsevierB.V.
B.V.
peer-review
underresponsibilityof SUSTAIN
conference’s
committee
and andsupported
by Kyoto
University;
Selection andand/orpeer-review
underresponsibilityof SUSTAIN
conferences
committee
supported
by Kyoto(OPIR), (GCOE-ES),(GCOE-HSE),(CSEAS), (RISH),(GCOE-ARS)
and (GSS) as andco-hosts.
University;(OPIR), (GCOE-ES),(GCOE-HSE),(CSEAS),(RISH), (GCOE-ARS)(GSS) as co-hosts.
Keywords: Peer Influence, Car Upgrading Desire, Car Satisfaction, Regret of Buying a Car

1. Introduction
Car ownership levels are increasing rapidly in many developing countries. Increasing income levels
allow in particular citizens of the major cities in developing countries to purchase more and larger
vehicles. One particular trend of South-East Asian countries is t
motorcycles owners to purchase cars. Other negative side effects, such as air and noise pollution,
accidents and land-use developments trends, are also well known.

* Corresponding author. Tel.: +81-75-383-3242; fax: +81-75-383-3236.
E-mail address: belgiawan@trans.kuciv.kyoto-u.ac.jp.

1878-0296 © 2013 The Authors. Published by Elsevier B.V.

Selection and peer-review under responsibility of SUSTAIN conference’s committee and supported by Kyoto University; (OPIR),(GCOE-ES), (GCOE-HSE), (CSEAS), (RISH), (GCOE-ARS) and (GSS) as co-hosts.
doi:10.1016/j.proenv.2013.02.063

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In Indonesia and other developing countries, this trend towards more and larger vehicles appears tokeep continuing despite the lower average speeds of cars compared to motorcycles in the alreadycongested cities and despite the well observable other environmental side effects. Indonesia, with a total
populatio
growth, the number of motorized vehicles rapidly increases according to Indonesian Central Agency ofStatistics [2]. In 1987, there were around 6 million motorcycles; while in 1995, there were already 10
million and by 2009, there were 60 million motorcycles brands that have been passed. Car numbers also
keep increasing, though not as fast as motorcycle in numbers. In 1987, there were around 1 million cars
and by the end of 2009, there were already 10 million private cars on Indonesian streets.
Almost all cities in Indonesia, except for Jakarta, do not have an advanced mass transportation system,
such as bus rapid transit (BRT). In Bandung, according to Joewono [3], 61.2% of public transports (PT)operated are in forms of Para-transit (Angkot), while the rest are bus, taxi and rickshaw. In Jakarta,
despite the development of BRT, investments in public transport do not seem to have a significant effect(yet) on motorisation as car ownership level increases [4]. This study, therefore, aims to better understandcar purchase motivations of individuals.
The structure of this paper is as follows: After this introduction, the second part of this paper will
discuss previous research about peer influence in car owning decision, which is also the main objective of
this paper. The following part discusses our survey among students in Bandung regarding their peer
influence to buy cars. We, then, describe first some aggregate statistics before employing correlation
analysis. The results are discussed and some conclusions drawn.
2. Literature Review
One of the studies about peer influence on car ownership is conducted by Goetzke and Weinberger; they study social network effects on car ownership. They particularly distinguish endogenous andcontextual effects following Manski [6]ur isinfluenced by the behaviou
group. Contextual effects refer to characteristics (not[5]incorporates both effects on the models finds that the peer effect coefficient (endogenous effect) is highly
significant. This suggests that the probability of owning a car is affected by the behaviour of socioeconomic peers and physical neighbours, meaning that people have a higher probability to go car-less ifthey are surrounded by other households who do not have cars. Gaker et al. [7] study the effect of othersof whom are undergraduate students. The results show that the subjects are influenced by the decision of
their peers in the experiments, leading the authors to conclude that social norms are amongst the mostpowerful influences on auto ownership decisions, including whether to buy a car and what type (hybrid orconventional). Ozaki and Sevastyanova [8] analyzed the market share of Prius in the U.K. They
conducted a survey among people who had purchased a Toyota Prius in the 24 months prior to January
2009 and their results also suggest that purchases are related to what people have seen others buy. They
discussed that, hence, promoting the message that hybrid cars are normal should be more widely
employed.
All the studies mentioned above are evidence for the importance of peer influence on car ownershipdecisions in developed countries which motivates this research to confirm the peer influence on the desire
to purchase another or better car in an Indonesian context. Although, our motivation is broader, we aim tounderstand not only the influence of peers but, more generally, which groups are likely to be importanton making. Since there has not been much research that specifically discusses thePrawira Fajarindra Belgiawan et al. / Procedia Environmental Sciences 17 (2013) 485 – 493

influence is associated with lower satisfaction level with their current car, because higher group influenceboug
negatively correlated and that regret is positively correlated with group influence. Thirdly, since
satisfaction and regret will influence the desire to own a different car and following from previous two
hypothesizes we test whether (past) group influence positively influence the desire to purchase a differentcar.
3. Methodology
3.1. Respondents
To understand whether there is a significant influence of peer group on car owning decision, a survey
was conducted in February 2011 in Bandung, Indonesia. Bandung is chosen as the target area because
currently it is the densest city in Indonesia and therefore experiences the most severe transportation
problems in Indonesia. The targets of the survey are students of Bandung Institute of Technology (ITB).
Students of ITB come from many regions in Indonesia so most of them do not share the same background.
Our survey focuses on undergraduate students between 17 until 23 of age, as they often purchase cars
within their four years at university. The majority of the samples were obtained through surveys inclassrooms at the end of lectures. Some additional surveys were obtained through randomly approaching
students in communal areas. In total 500 complete surveys (282 male and 218 female) could be obtained.
The respondents come from 25 departments; that means that most departments of ITB are represented.
134 respondents are car owners, while 366 do not have car. From this point on, we focus only on the 134
car owning students.
3.2. Questionnaire
We asked car owners to recall how much certain groups of people influenced their decision to buy the
car they currently own. The choices were given on a 7 points Likert scale,
he neverpartner; brother; sister; friends; classmate; student association mate and virtual network. Since they are
students we assumed that aside from family and probably partner, if they have one, they directly interact a
lot with campus mates and also virtual network mate; thus, friends, classmate, student association mateand virtual network are incorporated here. They are also asked how certain group of media influencesanswer range is also used
, finally, they have to answer whether they
will buy a new car or not in the future.
4. Summary Statistics
4.1. Descriptive Statistics

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From the result of the survey, we obtained 97 students who have a desire to upgrade their car and 37
students who have no desire to upgrade their car. We derived the desire to upgrade a car from thequestion asked to car owners whether they want to buy another car or not. Thus we imply that students
satisfaction and regret can be seen in Table 1. From the table we can see that most of the students arequite satisfied with their current car and most students have few regrets that they bought their current car.
Table 1. Descriptive statistic of satisfaction and regret.
VariableN

Mean

Std. Deviation

Satisfaction with current car

134

5.49

1.175

Regret with the car bought

134

1.94

1.175

For the group influence on past car owning decision, we decided to distinguish two samples. In thefirst sample,
analysis. For example, one might have no sister, and, so, might not have answered the question relating to
influence of sister. We note that this introduces a bias in our sample towards students from larger families.
ans that we consider for
example no brother as the same as no influence from a brother. The descriptive statistic can be seen in
Table 2.
Table 2. Descriptive statistic of influence group

Influence Group

Biased Sample

Full Sample

N

Mean

Std. Dev

N

Mean

Std. Dev

Father

133

4.71

1.918

134

4.68

1.937

Mother

133

4.19

2.049

134

4.16

2.060

Partner

108

2.12

1.678

134

1.90

1.570

Brother

114

3.14

2.013

134

2.82

2.007

Sister

118

2.91

2.013

134

2.68

1.987

Classmate

118

2.00

1.612

134

1.88

1.546

Student Association Mate

118

1.75

1.530

134

1.66

1.456

Friends

118

2.34

1.887

134

2.18

1.822

Virtual Network

116

1.55

1.253

134

1.48

1.181

Newspaper

124

3.60

1.719

134

3.41

1.791

TV Commercial

125

3.90

1.934

134

3.70

2.004

Radio Commercial

122

2.48

1.478

134

2.35

1.473

Car Expo

128

4.76

1.894

134

4.59

2.008

Internet Commercial

124

3.77

1.900

134

3.56

1.968

Based on the table in both samples, we can see that father and mother have high values which meanthat strong suggestions to buy their current car were given by parents. For partners and siblings, thevalues are not so high implying that these groups did not give strong suggestion/influence on the decision
to buy the current car. But, it is interesting to note that 114 out of 134 answer the question regardingPrawira Fajarindra Belgiawan et al. / Procedia Environmental Sciences 17 (2013) 485 – 493

ample. At current state, we cannot
confirm whether they have siblings or not.
As we mentioned before, since the respondents are undergraduate students, we assumed that they
directly interact with their classmate and also student association mate; hence, there is high possibility
that these peer groups influence the decision of students to purchase cars. But, from the result, we can seeclassmates and student association mate influence decisions less than friends. We do not give clear
definition about the term friends, while classmate, as well as student association mate, is clear bydefinition; but, for friends, it can have a wider scope or range from campus until neighbourhood. For
virtual network friends, we mentioned Facebook or Twitter as an example since almost all Indonesianstudents have Facebook and/or Twitter accounts; we assumed that the influence to purchase car from thisvirtual network friends is high; but, based on the table, we can see that virtual network friends give low
influence.
For commercial sources, such as newspapers, TV and internet commercials, quite high influencevalues are reported, although below the mid points. The similarity between these three media is in thevisual part they can see the product and they can read the information about certain types of car; in caseof TV, they can listen to the explanation. For radio commercial, although they can get much information
regarding car, but they might not be attracted to it since it is not visualized. Car Expo is different fromany other media mentioned before; the respondents can actually see the product. They can get information
regarding the product and experience it; thus, it gives higher influence in the decision to purchase car (ascan be seen in the table).
4.2. Principal Component Analysis
Table 3. Descriptive statistic of influence group
Influence Groups

Friends

AV
Commercial

ParentText
Commercial

Siblings

Classmate

.846









Student Association Mate

.821









Virtual Network

.782









Friends

.777









Partner

.712









Car Expo



.781







TV Commercial



.781







Radio Commercial



.515







Mother





.852





Father





.774





Newspaper







.830



Internet Commercial







.631



Brother









.800

Sister









.568

489

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For the biased sample, a principle component analysis (PCA) with varimax rotation was performed on
the 14 influence variables to construct uncorrelated groups of peer influence toward decision to upgradecars. The results are reported in Table 3.
All groups with eigen-values more than 1 are selected, which leave us with five constructions which
explain 69.4% of the variance. For ease of presentation, only measures that have group loadings larger
than 0.5 are used. The first group accounted for 24.99% variance. Variables loaded on this group mostly
refer to friends group, such as classmate, student association mate and virtual network. Therefore, thisgroup was named Friends. The second group accounts for 13.52% of variance. Variables loaded on thisgroup partly include audio and visual commercial, such as car expo, TV and radio commercials.
Therefore, this group was named Audio Visual (AV) Commercial. The third group accounts for 10.74% ofvariance and include father and mother; thus we named this group Parents. The fourth group accounts for
10.67% of variance and include newspaper and internet commercial; thus, we named this group Text
Commercial. And finally, the last group accounts for 9.48% of variance and include brother and sister;thus we named this group Siblings.
For full sample, a principle component analysis with varimax rotation was performed on the 14
influence variables to construct uncorrelated groups of peer influence toward decision to upgrade cars. All
groups with eigen-values more than 1 are selected which leaves us with four constructs which explain
62.4% of the variance. For ease of presentation, only measures that have group loadings larger than 0.5
are reported in Table 4. The first group accounted for 24.5% variance. Variables loaded on this groupmostly refer to friends group, such as classmate, student association mate, virtual network, etc. Therefore,
this group was named Friends. The second group accounts for 16.46% of variance. Variables loaded on
this group include commercials, such as car expo, TV and radio commercials. Therefore, this group wasnamed Commercial. The third group accounts for 10.75% of variance and include brother and sister; thus
we named this group Siblings. And finally, the last group accounts for 10.68% of variance and include
father and mother; thus, we named this group Parents.
Table 4. Descriptive statistic of influence group
Influence Groups

Friends

Commercial

Siblings

Parents

Student Association Mate

.852







Classmate

.850







Partner

.763







Friends

.738







Virtual Network

.692







Internet Commercial



.730





Newspaper



.704





TV Commercial



.674





Car Expo



.574





Radio Commercial



.571





Brother





.805



Sister





.633



Mother







.887

Father







.768

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4.3. Correlation Analysis
For biased sample, the correlation between desire to upgrade, influence group, satisfaction and regret
can be seen in table 5 below. As can be seen, car upgrading desire does not have any significant
correlation with any influence group nor with level of satisfaction of current car. But it has significant
negative correlation with regret of having bought the current car. The level of satisfaction of current car
has a significant correlation with the influence group, particularly parent and siblings. This might imply
that family influence has a significant correlation on the level of satisfaction on current car. The level ofsatisfaction also has strong negative correlation with regret of having bought a car. The regret of havingbought the current car has a negative significant correlation with influence groups particularly parents aswell as monthly income. Since their parents suggested them to buy a car, probably they have no objection
hence regret less. While for monthly income, the higher monthly income means they probably buy more
expensive cars and hence regret less.
Table 5. Correlation Between Desire To Upgrade, Influence Group, Satisfaction, Regret, Monthly Income and Gender for
Biased Sample
Influence Group
Variable

Satisfy

RegretMonthly
IncomeGender(Male).153.117-0.16*

-.110

.135

.152

.207**

-.474***

.105

-.046

-0.178*

-.118

-.067





-.196*

.083

.198

.135

.042

.096

-.116

-.088

.021

-.033

Friends

AV
Commercial

ParentText
Commercial

Siblings

Car upgrading
desire

-.128

.157

.126

.057

Satisfaction withcurrent car

-.115

-.032

.246**

Regret of havingbought a car

.144

-.057

Monthly Income.164

Gender (Male)

.135

-.056

***. Correlation is significant at the 0.01 level (2-tailed).
**. Correlation is significant at the 0.05 level (2-tailed).
*. Correlation is significant at the 0.1 level (2-tailed).

For full sample, the correlation between desire to upgrade, influence group, satisfaction and regret canbe seen in Table 6 below. As can be seen, car upgrading has a significant correlation with influencegroups particularly siblings. It has no significant correlation with level of satisfaction and regret of currentcar. Level of satisfaction of current car has significant correlation with the influence group particularlycommercial; it might imply that commercial influences the higher level of satisfaction with the current car
vice versa. Aside from that, level of satisfaction also has positive correlation with siblings and parentsgroup, almost the same as biased sample. Furthermore, also same as for the biased sample, there is astrong negative correlation with regret. Also, in this sample regret of having bought the current car, it hasa significant negative correlation with monthly income. The higher monthly income means they probably
buy more expensive cars and, hence, regret less. Beside with regret, monthly income has significant
correlation with influence from friends. We might say that students with higher income hav
worry more about influence from friends. Finally, we find that male students are more
likely to be influenced by siblings; it is possibly because they discuss car purchase decisions more with
their siblings.

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Prawira Fajarindra Belgiawan et al. / Procedia Environmental Sciences 17 (2013) 485 – 493

Table 6. Correlation Between Desire To Upgrade, Influence Group, Satisfaction, Regret, Monthly Income and Gender for Full
SampleVariable

Influence Group
Friends

Commercial

Siblings

ParentCar upgrading desire

-.043

.128

.232***.073

Satisfaction with current car-.059.178**.177**.168*

Regret of having bought a car

.076

-.137

-.105

-.078

Monthly Income

.183*

.107

.125

.143

Gender (Male)

-.131

-.018

.173*

.059

Satisfy

RegretMonthly
IncomeGender(Male)

.117

-.160

-.110

.135

-.474***

.105

-.046

-.196*.083-.056***. Correlation is significant at the 0.01 level (2-tailed).
**. Correlation is significant at the 0.05 level (2-tailed).
*. Correlation is significant at the 0.1 level (2-tailed).

5. Conclusion
Regarding influence constructed by PCA in this research (except for siblings), we find that thesegroups might not be the determinant variables for a desire to upgrade to a new car. Note that since these
influence groups are constructed by their past experience, there is a possibility that they might bedeterminants if they are constructed from student present situation; however, this should be studied more.
Regarding satisfaction level and regret level, we found from the correlation analysis that satisfaction levelhas a significant correlation with siblings and parents, while regret level also has slightly negative
correlation with parent (family); this might imply that the suggestion from siblings and parents (family) isin accordance with what students need since parents might be the ones who understand better what
students need. Therefore, we recommend that parents should get involved in student
considering costs and their usefulness.
In general, our second important result is that the satisfaction level does not appear to influence thedecision to upgrade to a new car, even though it is highly correlated with other variables such as influence
and regret. The influence of siblings might hint at other factors such as comparing oneself to others areimportant factors.
This research cannot confirm whether peer influence exists in car owning desire particularly car
upgrading desire. Further research is needed to study peer influence using different methods and adifferent questionnaire. This research incorporates students past interaction with their peers as a basis of
the analysis; while it might explain why they bought their current cars, it cannot explain well their future
decisions. The new survey should incorporate the attitudes of students peers towards students owning cars,
also the expectation of peers towards students car owning decision in the future and, lastly, how importantthese peer groups are in the decision to own a car in the future. Hopefully, by considering these threeimportant points, the new survey, which is currently under preparation, might be able to explain peers
influence on student s car owning decisions better.
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