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.
| Original language | English |
|---|---|
| Pages (from-to) | 1-16 |
| Number of pages | 16 |
| Journal | International Economic Journal |
| Volume | 37 |
| Issue number | 1 |
| DOIs | |
| State | Published - 2023 |
Bibliographical note
Funding Information:Jungwon Yeo is grateful for the financial support by a 2-Year Research Grant of Pusan National University [grant number 202009670003]. The usual disclaimer applies. We greatly thank the anonymous reviewers for their insightful comments and highly constructive suggestions.
Publisher Copyright:
© 2023 Korea International Economic Association.
Keywords
- endogenous sample attrition
- estimation of panel data models
- Peer effects
- smartphone adoption