The influence of financial constraint on peer influence of cash dividend decision – Evidence from China

We analyse the influence of financial constraints on the peer effect of dividend decision in China by employing the Carhart four-factor model to construct instrument variables of peer influence. We find that (1) the decision of whether to pay cash dividends (DIV) is significantly influenced by peers, and the estimated marginal effect is 0.53%, but the question of whether to pay catering dividends and the extent of such dividends to be paid are not significantly affected by peers. (2) Under the semi-mandatory dividend policy in China, financial constraints will significantly reduce peer influence on the dividend level. (3) Peer influence on DIV is more pronounced among companies that face high financial constraints.

A Proposal of Spatial Measurement of Peer Effect through Socioeconomic Indices and Unsatisfied Basic Needs

This paper investigates peer effects in the academic achievement of Costa Rican students. Two measures of peer effects are used: (1) a measure of a schools’ average socioeconomic status and (2) a measure of unsatisfied basic needs at district level. The estimation of a three-level hierarchical model allows us to deal with selection bias and unobserved heterogeneity. Results show that socioeconomic peer effect, both at school and district levels, positively and significantly correlates with academic achievement. An increase in one standard deviation in the socioeconomic index has the same effect on academic achievement as an additional year of schooling; two years if the improvement occurs in the index of unsatisfied basic needs. These results are robust for mathematics, reading and science. Results from quantile regression reveal that students with high academic achievement take greater advantages from studying in schools with higher socioeconomic status (mathematics and reading). Meanwhile, students with low academic achievement are the most affected by studying in poorer districts (mathematics and science).These results show the strong feedback between educational and social inequity and constitute a good example of how poverty traps can persist in developing countries.

The Effect of Social Behavior on Residential Water Consumption

We analyze how residential water consumption is influenced by the consumption of households belonging to the same social group (peer effect). Analyses are based on household-level data provided by the Brazilian Household Budget Survey and use an innovative strategy that estimates the spatial dependence of water consumption while simultaneously controlling for potential sources of sample selectivity and endogeneity. The estimates of our quantile regression models highlight that, conditional on household characteristics, the greater the household water consumption, the greater the peer effect. In other words, the overconsumption of residential water seems to be influenced mainly by the behavior of social peers.