Consumption Network Effects

Giacomo De Giorgi, Anders Frederiksen () and Luigi Pistaferri ()
Additional contact information
Luigi Pistaferri: Stanford University

No 9983, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper we study the relevance and mechanics of consumption network effects. We use long panel data on the entire Danish population to construct a measure of consumption based on administrative tax records, and define the peer groups in terms of workplace, occupation, education, and age. We then apply an IV strategy, and fixed effect models, to recover the effects. Our instruments arise naturally from the network structure and firms shocks. The estimated effects are statistically significant and relevant for policies as they generate non-negligible multiplier effects. Further, the results are consistent with a "Keeping-up" model.

Keywords: consumption; networks; social multiplier; risk sharing (search for similar items in EconPapers)
JEL-codes: D12 D85 E21 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2016-06
New Economics Papers: this item is included in nep-cse, nep-mac, nep-net and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published - published in: Review of Economic Studies, 2020, 87 (1), 130-163

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https://docs.iza.org/dp9983.pdf (application/pdf)

Related works:
Journal Article: Consumption Network Effects (2020)
Working Paper: Consumption Network Effects (2018)
Working Paper: Consumption Network Effects (2016)
Working Paper: Consumption Network Effects (2016)
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