Working Paper: NBER ID: w25161
Authors: Ori Heffetz
Abstract: Expenditure visibility—the extent to which a household’s spending on a consumption category is noticeable to others—is measured in three new surveys, with ~3,000 telephone and online respondents. Visibility shows little change across time (ten years) and survey methods. Four different notions, or dimensions, of visibility are measured: the noticeability of above-average spending on a category; that of below-average spending; and the positivity/negativity of impressions made by above- and below-average spending. Jointly, these visibility measures explain up to three quarters or more of the observed variation in total-expenditure elasticities across consumption categories in U.S. data. Possible theoretical explanations are explored.
Keywords: Expenditure Visibility; Consumer Behavior; Elasticities; Surveys
JEL Codes: D12; D83; D91; Z13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| higher visibility of above-average expenditures (H59) | increased total-expenditure elasticities (H30) |
| visibility measures (C52) | variation in elasticities (D11) |
| difference between upward and downward visibility (P27) | expenditure elasticities (D12) |
| visibility measures (C52) | consumer behavior (D19) |