Neighbors matter
Subtitle: causal community effects and stock market participation
By: Jeffrey R. Brown ... [et al.]
Contributors: Brown, Jeffrey R. 1968-; National Bureau of Economic Research.
Series: NBER working paper series -- no. 13168.; Working paper series (National Bureau of Economic Research) -- working paper no. 13168.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 29
Subjects: Social interaction -- Economic aspects; Communities -- Economic aspects; Stockholders -- Decision making -- Econometric models
Description: "This paper establishes a causal relation between an individual's decision of whether to own stocks and average stock market participation decision of the individual's community. We instrument for the average ownership of an individual's community with lagged average ownership of the states in which one's non-native neighbors were born. Combining this instrumental variables approach with controls for individual and community fixed effects, a broad set of time-varying individual and community controls, and state-by-year effects, rules out alternative explanations. To further establish that word-of-mouth communication drives this causal effect, we show that the results are stronger in more sociable communities."--abstract.
Notes: "June 2007"

Includes bibliographical references (p. 22-23).

Also available in PDF from the NBER World Wide Web site (www.nber.org).