Neighbors Matter: Causal Community Effects and Stock Market Participation
利用工具变量法，证明个人是否持股受其所在社区平均持股率的因果影响，且这种效应在社交更活跃的社区更强，为口碑传播机制提供证据。
ABSTRACT This paper establishes a causal relation between an individual's decision whether to own stocks and average stock market participation of the individual's community. We instrument for the average ownership of an individual's community with lagged average ownership of the states in which one's nonnative neighbors were born. Combining this instrumental variables approach with controls for individual and community fixed effects, a broad set of time‐varying individual and community controls, and state‐year effects rules out alternative explanations. To further establish that word‐of‐mouth communication drives this causal effect, we show that the results are stronger in more sociable communities.