Intra-Household Peer Effects in Smartphone Adoption

Minjung Park and Jungwon Yeo

International Economic Journal, 2023, vol. 37, issue 1, 1-16

Abstract: This paper examines intra-household peer effects in the adoption of smartphones using unique South Korean panel data. Consistent estimation of peer effects in this setting needs to address two key challenges: homophily and endogenous sample attrition. We address both challenges and obtain consistent estimates of peer effects, by first-differencing the individual-level panel data and then using longer differences of the independent variables as instruments. The estimation results show that an individual becomes much more likely to adopt a smartphone if other household members have previously adopted one. The analysis also reveals that failure to account for endogenous attrition of individuals after product adoption would lead to a significant under-estimation of peer effects.

Date: 2023
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DOI: 10.1080/10168737.2023.2169738

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