Neighborhood effects on speculative behavior
Keith Vorkink and
Journal of Economic Behavior & Organization, 2018, vol. 151, issue C, 42-61
Speculative behavior plays a key role in numerous markets, but little is known about its causes. We test for neighborhood effects on speculative behavior using daily lottery sales data from 20 states in the U.S. In a sample of 160,000 retailers, lottery sales in a census block increase by $0.26, on average, for each $1 increase in neighboring blocks. We test whether this correlation is attributable to contextual effects, correlated effects, or endogenous effects. Our analysis suggests that social interaction is an important cause of speculative behavior.
Keywords: Speculative behavior; Neighborhood effects; Social interaction; Lottery; Skewness preference (search for similar items in EconPapers)
JEL-codes: D10 G11 H20 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:151:y:2018:i:c:p:42-61
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