Do you ever model characters on real people?

People often ask me about characters and real people.  They want to know if So and SO was based on (insert name of friend, colleague, relative here). 


I wouldn't say any character is based on any one real person.  However, some characters were

inspired or partly inspired by real people.  What I may do is give a character a certain relative's quirks or mannerisms, and a physical description similar to a friend, plus the aptitudes of a colleague.  Often the inspirations will be people I knew long ago, or people I did not know well, such as a teacher from grade school, or the teller I see regularly at the bank. 


As well, when I am trying to flesh out a character - give them a background, hobbies, phobias, experiences and so on - I often think of what people I know have said and done.  In Blood and Groom there is a mention that a character had once one trekking in the Himalayas.  That came out of hearing of an acquaintance's trip, but that's as far as it went.  The character in this case is male - the real person is female, the duration of the trip, time of year and all that were different.  In another situation, a character eats something that I never would, but had heard about from a friend. 


Another thing that I will draw on from people I know is references to pets.  I've never had any (wish I could, but I have allergies, damn...)  So, I may insert my friend's rambunctious puppy or my neighbour's parrot (who sits on her head all the time!).


I think as writers, we sort of observe day-to-day life, and see the story in it, or the appeal of it in creating a character, or a plot line, or a snippet of dialogue.


What do you think?