Information diffusion effects in individual investors' common stock purchases
Subtitle: covet thy neighbors' investment choices
By: Zoran Ivkovich, Scott Weisbenner.
Contributors: Weisbenner, Scott J.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 13201.; Working paper series (National Bureau of Economic Research) -- working paper no. 13201.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 49
Subjects: Finance, Personal -- Social aspects; Stocks
Description: "We study the relation between households' stock purchases and stock purchases made by their neighbors. A ten percentage point increase in neighbors' purchases of stocks from an industry is associated with a two percentage point increase in households' own purchases of stocks from that industry. The effect is considerably larger for local stocks and among households in more social states. Controlling for area sociability, households' and neighbors' investment style preferences, and the industry composition of local firms, we attribute approximately one-quarter to one-half of the correlation between households' stock purchases and stock purchases made by their neighbors to word-of-mouth communication."--abstract.
Notes: "June 2007"

Includes bibliographical references (p. 33-36).

Also available in PDF from the NBER world wide web site (www.nber.org).