Template-Type: ReDIF-Paper 1.0
Title: Peer Effects in Financial Decisions: Evidence from Dutch Administrative Data
Author-Name: Katja M. Kaufmann
Author-Email: katja.kaufmann@uni-bayreuth.de
Author-Name: Yasemin Özdemir
Author-Email: yasemin.oezdemir@uni-bayreuth.de
Author-Name: Michaela Paffenholz
Author-Email: michaela.paffenholz@econ.lmu.de

Classification-JEL: G11, G53, G51, Z13
Keywords: spillovers, peer effects, financial decisions, stock market participation

Abstract: We study whether, to what extent, and how a couple’s decision to invest into risky assets the
first time is affected by their social environment, in particular by their (adult) siblings and their
coworkers. We provide causal evidence of peer effects in financial decisions, making use of
Dutch administrative data and an IV strategy with partially overlapping peer groups. We find
that positive asset market experiences of siblings, as well as of coworkers, generate positive
spillover effects in terms of first-time investments in risky assets. These effects are primarily
driven by the siblings and coworkers of the male partner in the couple ("receiver" of the signal).
However, coworker spillovers are also relevant for full-time employed women. In terms of
"sender" of the signal, only male coworkers lead to spillovers, for the couple overall and for
female and male partner separately, consistent with men being more likely to talk about their
financial successes. Heterogeneity analyses show that peer spillovers are particularly important
for highly (financially) educated and more privileged couples, consistent with them having the
financial means as well as the (financial) knowledge to be able to evaluate and respond to the
signal of positive asset market experiences of peers.

Note: 
Length: 42
Creation-Date: 2024-05
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp553
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2024_553