IDEAS home Printed from https://ideas.repec.org/a/aea/aejapp/v2y2010i2p241-75.html
   My bibliography  Save this article

Identification of Social Interactions through Partially Overlapping Peer Groups

Author

Listed:
  • Giacomo De Giorgi
  • Michele Pellizzari
  • Silvia Redaelli

Abstract

In this paper, we demonstrate that, in a context where peer groups do not overlap fully, it is possible to identify all the relevant parameters of the standard linear-in-means model of social interactions. We apply this novel identification structure to study peer effects in the choice of college major. Results show that one is more likely to choose a major when many of her peers make the same choice. We also show that peers can divert students from majors in which they have a relative ability advantage, with adverse consequences on academic performance, entry wages, and job satisfaction. (JEL I23, J24, J31, Z13)

Suggested Citation

  • Giacomo De Giorgi & Michele Pellizzari & Silvia Redaelli, 2010. "Identification of Social Interactions through Partially Overlapping Peer Groups," American Economic Journal: Applied Economics, American Economic Association, vol. 2(2), pages 241-275, April.
    • Handle: RePEc:aea:aejapp:v:2:y:2010:i:2:p:241-75
    Note: DOI: 10.1257/app.2.2.241
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/app.2.2.241
    Download Restriction: no
    File URL: http://www.aeaweb.org/aej/app/data/2009-0137_data.zip
    Download Restriction: no
    File URL: http://www.aeaweb.org/aej/app/app/2009-0137_app.pdf
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    References listed on IDEAS

    as
    1. Blundell,Richard & Newey,Whitney K. & Persson,Torsten (ed.), 2006. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521871525.
    2. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(3), pages 531-542.
    3. Freeman, Richard B. & Goroff, Daniel L (ed.), 2009. "Science and Engineering Careers in the United States," National Bureau of Economic Research Books, University of Chicago Press, number 9780226261898, October.
    4. Bryan S. Graham, 2008. "Identifying Social Interactions Through Conditional Variance Restrictions," Econometrica, Econometric Society, vol. 76(3), pages 643-660, May.
    5. David J. Zimmerman, 2003. "Peer Effects in Academic Outcomes: Evidence from a Natural Experiment," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 9-23, February.
    6. Giacomo De Giorgi & Michele Pellizzari, 2014. "Understanding Social Interactions: Evidence from the Classroom," Economic Journal, Royal Economic Society, vol. 124(579), pages 917-953, September.
    7. Robst, John, 2007. "Education and job match: The relatedness of college major and work," Economics of Education Review, Elsevier, vol. 26(4), pages 397-407, August.
    8. Esther Duflo & Emmanuel Saez, 2003. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 815-842.
    9. Blundell,Richard & Newey,Whitney K. & Persson,Torsten (ed.), 2006. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521692083.
    10. Patrick Bayer & Randi Hjalmarsson & David Pozen, 2009. "Building Criminal Capital behind Bars: Peer Effects in Juvenile Corrections," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 105-147.
    11. Piero Cipollone & Alfonso Rosolia, 2007. "Social Interactions in High School: Lessons from an Earthquake," American Economic Review, American Economic Association, vol. 97(3), pages 948-965, June.
    12. Peter Gottschalk & Michael Hansen, 2003. "Is the Proportion of College Workers in Noncollege Jobs Increasing?," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 409-448, April.
    13. Pietro Garibaldi & Francesco Giavazzi & Andrea Ichino & Enrico Rettore, 2012. "College Cost and Time to Complete a Degree: Evidence from Tuition Discontinuities," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 699-711, August.
    14. Keith A. Bender & John S. Heywood, 2009. "Educational Mismatch among Ph.D.s: Determinants and Consequences," NBER Chapters, in: Science and Engineering Careers in the United States: An Analysis of Markets and Employment, pages 229-255, National Bureau of Economic Research, Inc.
    15. Jonathan Guryan & Kory Kroft & Matthew J. Notowidigdo, 2009. "Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments," American Economic Journal: Applied Economics, American Economic Association, vol. 1(4), pages 34-68, October.
    16. Adriaan R. Soetevent, 2006. "Empirics of the Identification of Social Interactions; An Evaluation of the Approaches and Their Results," Journal of Economic Surveys, Wiley Blackwell, vol. 20(2), pages 193-228, April.
    17. Scott E. Carrell & Richard L. Fullerton & James E. West, 2009. "Does Your Cohort Matter? Measuring Peer Effects in College Achievement," Journal of Labor Economics, University of Chicago Press, vol. 27(3), pages 439-464, July.
    18. Bruce Sacerdote, 2001. "Peer Effects with Random Assignment: Results for Dartmouth Roommates," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 681-704.
    19. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
    20. Graham, Bryan S. & Hahn, Jinyong, 2005. "Identification and estimation of the linear-in-means model of social interactions," Economics Letters, Elsevier, vol. 88(1), pages 1-6, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giacomo DeGiorgi, "undated". "Be As Careful Of The Company You Keep As Of The Books You Read. Peer Effects In Education And On The Labor Market," Discussion Papers 07-054, Stanford Institute for Economic Policy Research.
    2. Giacomo De Giorgi & Anders Frederiksen & Luigi Pistaferri, 2020. "Consumption Network Effects," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(1), pages 130-163.
    3. De Giorgi, Giacomo & Pellizzari, Michele & Redaelli, Silvia, 2007. "Be as Careful of the Books You Read as of the Company You Keep: Evidence on Peer Effects in Educational Choices," IZA Discussion Papers 2833, Institute of Labor Economics (IZA).
    4. Bet Caeyers, 2014. "Peer effects in development programme awareness of vulnerable groups in rural Tanzania," CSAE Working Paper Series 2014-11, Centre for the Study of African Economies, University of Oxford.
    5. repec:oxf:wpaper:wps/2014-11 is not listed on IDEAS
    6. Koen Jochmans, 2023. "Testing random assignment to peer groups," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 38(3), pages 321-333, April.
    7. Bramoullé, Yann & Djebbari, Habiba & Fortin, Bernard, 2009. "Identification of peer effects through social networks," Journal of Econometrics, Elsevier, vol. 150(1), pages 41-55, May.
    8. Kuersteiner, Guido M. & Prucha, Ingmar R. & Zeng, Ying, 2023. "Efficient peer effects estimators with group effects," Journal of Econometrics, Elsevier, vol. 235(2), pages 2155-2194.
    9. Stefan Speckesser & Sophie Hedges, 2017. "Peer Effects and Social Influence in Post-16 Educational Choice," National Institute of Economic and Social Research (NIESR) Discussion Papers 483, National Institute of Economic and Social Research.
    10. Sophie Hedges & Stefan Speckesser, 2017. "Peer Effects and Social Influence in Post-16 Educational Choice," CVER Research Papers 008, Centre for Vocational Education Research.
    11. Alice Battiston & Sophie Hedges & Thomas Lazarowicz & Stefan Speckesser, 2020. "Peer Effects and Social Influence in Post-16 Educational Choice," CVER Research Papers 025, Centre for Vocational Education Research.
    12. Gonzalo Vazquez-Bare, 2017. "Identification and Estimation of Spillover Effects in Randomized Experiments," Papers 1711.02745, arXiv.org, revised Jan 2022.
    13. Giorgio Brunello & Maria De Paola & Vincenzo Scoppa, 2010. "Peer Effects In Higher Education: Does The Field Of Study Matter?," Economic Inquiry, Western Economic Association International, vol. 48(3), pages 621-634, July.
    14. Gioia De Melo, 2011. "Peer effects identified through social networks. Evidence from Uruguayan schools," Department of Economics University of Siena 627, Department of Economics, University of Siena.
    15. Michela Tincani, 2017. "Heterogeneous Peer Effects and Rank Concerns: Theory and Evidence," Working Papers 2017-006, Human Capital and Economic Opportunity Working Group.
    16. Berlinski, Samuel & Busso, Matias & Giannola, Michele, 2023. "Helping struggling students and benefiting all: Peer effects in primary education," Journal of Public Economics, Elsevier, vol. 224(C).
    17. Gueye, Ababacar S. & Audibert, Martine & Delaunay, Valérie, 2018. "Can social groups impact schooling decisions? Evidence from castes in rural Senegal," World Development, Elsevier, vol. 110(C), pages 307-323.
    18. Jose-Alberto Guerra & Myra Mohnen, 2022. "Multinomial Choice with Social Interactions: Occupations in Victorian London," The Review of Economics and Statistics, MIT Press, vol. 104(4), pages 736-747, October.
    19. ÖZGÜR, Onur & BISIN, Alberto, 2011. "Dynamic Linear Economies with Social Interactions," Cahiers de recherche 04-2011, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    20. Federico Ciliberto & Amalia R. Miller & Helena Skyt Nielsen & Marianne Simonsen, 2016. "Playing The Fertility Game At Work: An Equilibrium Model Of Peer Effects," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(3), pages 827-856, August.
    21. Michela Maria Tincani, 2017. "Heterogeneous Peer Effects and Rank Concerns: Theory and Evidence," CESifo Working Paper Series 6331, CESifo.

    More about this item

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Identification of Social Interactions through Partially Overlapping Peer Groups (American Economic Journal: Applied Economics 2010) in ReplicationWiki

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejapp:v:2:y:2010:i:2:p:241-75. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.