Agarwal, S., Qian, W. and Zou, X.  <br/><br/>
Thy neighbor's misfortune: Peer effect on consumption 

 - American Economic Journal: Economic Policy   
 - 13(2). May, 2021: p.1-25 
<br/><br/> Using a large, representative sample of credit and debit card transactions in Singapore, this paper studies the consumption response of individuals whose same-building neighbors experienced personal bankruptcy. The unique bankruptcy rules in Singapore suggest liquidity shocks drive personal bankruptcy decisions, leading to a substantial drop in consumption for the bankrupt. Peers' monthly card consumption decreases by 3.4 percent over the 1-year postbankruptcy period. There exists no consumption decrease among individuals in immediately adjacent buildings nor for consumers with diminished postevent social ties with the bankrupt. The findings imply a significant social multiplier effect of 2.8 times the original consumption shock. – Reproduced