Visual Influence and Social Groups

Abstract

New car purchases are among the largest and most expensive purchases consumers ever make. While functional and economic concerns are important, the authors examine whether visual influence also plays a role. Using a hierarchical Bayesian probability model and data on 1.6 million new cars sold over nine years, they examine how visual influence affects purchase volume, focusing on three questions: Are people more likely to buy a new car if others around them have recently done so? Are these effects moderated by visibility, the ease of seeing others' behavior? Do they vary according to the identity (e.g., gender) of prior purchasers and the identity relevance of vehicle type? The authors perform an extensive set of tests to rule out alternatives to visual influence and find that visual effects are (1) present (one additional purchase for approximately every seven prior purchases), (2) larger in areas where others' behavior should be more visible (i.e., more people commute in car-visible ways), (3) stronger for prior purchases by men than by women in male-oriented vehicle types, (4) extant only for cars of similar price tiers, and (5) subject to saturation effects.

An age structured demographic theory of technological change

“…I shall go further and claim that we can use the measured diversity of sales and interpret it in terms of the diversity of agents. In such a perspective, technology sales by type and model reinforce technology sales of those types and models, consistent with the work of McShane et al (2012). This is a situation of increasing returns to adoption, discussed by Arthur (1989), which, combined with diversity, he demonstrates leads to path dependence and several equilibrium points.…”

Peer Effects and Voluntary Green Building Certification

“…The installed base is the total number or size of the technologies adopted in the peer group. Using the installed base to explain diffusion of a product or technology has been common in the literature [16,26,[30][31][32][33][34][35][36].…”

Assessing the effectiveness of South Africa’s emissions based purchase tax for private passenger vehicles: a consumer choice modelling approach.

“…The purchase of a new vehicle is one of the largest single expenses that consumers are likely to make during their lives, so it is a decision that requires careful consideration of various economic and functional factors (McShane et al, 2012). Marketing research, however, has shown that the demand for products goes far beyond their price and function.…”

“…For instance, the consumption of particular goods can serve as markers of social identity within a group or association to a group. Research in the fields of economics, psychology, marketing, anthropology and sociology has recognised how social influence shapes decision making, concluding that people exhibit a strong tendency to conform to the observed behaviour of others: 'visual influence' (Burnkrant & Cousineau, 1975;McShane et al, 2012). It was illustrated by McShane et al (2012) that this phenomenon holds for large purchases like vehicles.…”

“…The behaviour of other members of a group act as a form of social proof or norm that people must follow to remain in the group (McShane et al, 2012). This may manifest in people purchasing vehicles from a specific price subset of the vehicle market that is suitable to their social group and income level.…”