Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/249270 
Year of Publication: 
2022
Series/Report no.: 
Economics Working Paper Series No. 22/366
Publisher: 
ETH Zurich, CER-ETH - Center of Economic Research, Zurich
Abstract: 
This article sheds light on a scarcely explored area of research related to herd behavior in urban settings of developing economies, where the use of motorized twowheelers has been increasing rapidly. Using primary survey-based data from Nepal, we examine whether potential motorcycle buyers in the Kathmandu valley exhibit herd behavior or price-conscious behavior when making a hypothetical choice decision and then evaluate the determinants of the observed behavior. Using factor analysis, the paper identifies distinct homogeneous groups of respondents based on their preferences towards motorcycle attributes and on their psychological traits and attitudes. Not only do we find a prevalence of herding in the choice of motorcycles, the results also find strong suggestive evidence that, in addition to gender and income, several latent factors related to preferences and psychological traits might play a crucial role in determining the herd behavior. We discuss policy implications in the context of consumer behavior and environmental policy in the backdrop of rapid vehicle demand and dangerous air pollution levels.
Subjects: 
herd behavior
determinants
motorcycle choice
psychological factors
bounded rationality
Nepal
JEL: 
D12
D83
D91
Q58
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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