Citation

Discussion Paper Details

Please find the details for DP15556 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Social Finance

Author(s): Theresa Kuchler and Johannes Ströbel

Publication Date: December 2020

Keyword(s):

Programme Area(s): Financial Economics

Abstract: We review an empirical literature that studies the role of social interactions in driving economic and financial decision making. We first summarize recent work that documents an important role of social interactions in explaining household decisions in housing and mortgage markets. This evidence shows, for example, that there are large peer effects in mortgage refinancing decisions and that individuals' beliefs about the attractiveness of housing market investments are affected by the recent house price experiences of their friends. We also summarize the evidence that social interactions affect the stock market investments of both retail and professional investors as well as household financial decisions such as retirement savings, borrowing, and default. Along the way, we describe a number of easily accessible recent data sets for the study of social interactions in finance, including the "Social Connectedness Index,'' which measures the frequency of Facebook friendship links across geographic regions. We conclude by outlining several promising directions for further research in the field of "social finance.''

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=15556

Bibliographic Reference

Kuchler, T and Ströbel, J. 2020. 'Social Finance'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=15556