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A discrete choice model with social interactions; with an application to high school teen behavior

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Author Info
Soetevent, Adriaan R.
Kooreman, Peter (Groningen University)

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Abstract

We develop an empirical discrete choice interaction model with a finite number of agents. We characterize its equilibrium properties - in particular the correspondence between the interaction strength, the number of agents, and the set of equilibria - and propose to estimate the model by means of simulation methods. In an empirical application, we analyze the individual behavior of some 8000 high school teenagers from almost 500 different school classes. We find endogenous social interaction effects to be strong for behavior closely related to school (truancy), somewhat weaker for behavior partly related to school (smoking, cell phone ownership, and moped ownership) and absent for behavior far away from school (asking parents\' permission for purchases). Intra-gender interactions are generally much stronger than cross-gender interactions

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Paper provided by University of Groningen, CCSO Centre for Economic Research in its series CCSO Working Papers with number 200401.

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Date of creation: 2004
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Handle: RePEc:dgr:rugccs:200401

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  1. Esther Duflo & Emmanuel Saez, 2003. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," Natural Field Experiments 0036, The Field Experiments Website. [Downloadable!]
  2. Stern, Steven, 1992. "A Method for Smoothing Simulated Moments of Discrete Probabilities in Multinomial Probit Models," Econometrica, Econometric Society, vol. 60(4), pages 943-52, July. [Downloadable!] (restricted)
  3. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 115-136, Summer. [Downloadable!] (restricted)
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  4. Aronsson, Thomas & Blomquist, Sören & Sacklén, Hans, 1998. "Identifying Interdependent Behavior in an Empirical Model of Labor Supply," Working Paper Series 147, Trade Union Institute for Economic Research. [Downloadable!]
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  5. Kent Smetters & Jennifer Gravelle, 2001. "The Exchange Theory of Teenage Smoking and the Counterproductiveness of Moderate Regulation," NBER Working Papers 8262, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Alejandro Gaviria & Steven Raphael, 2001. "School-Based Peer Effects And Juvenile Behavior," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 257-268, May. [Downloadable!] (restricted)
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  7. Vives, Xavier, 1990. "Nash equilibrium with strategic complementarities," Journal of Mathematical Economics, Elsevier, vol. 19(3), pages 305-321. [Downloadable!] (restricted)
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  8. Kooreman, Peter, 1994. "Estimation of Econometric Models of Some Discrete Games," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(3), pages 255-68, July-Sept. [Downloadable!] (restricted)
  9. Brian Krauth, 2006. "Social interactions in small groups," Canadian Journal of Economics, Canadian Economics Association, vol. 39(2), pages 414-433, May. [Downloadable!] (restricted)
  10. Pollak, Robert A, 1976. "Interdependent Preferences," American Economic Review, American Economic Association, vol. 66(3), pages 309-20, June.
  11. Brock, William A & Durlauf, Steven N, 2001. "Discrete Choice with Social Interactions," Review of Economic Studies, Blackwell Publishing, vol. 68(2), pages 235-60, April.
  12. 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, MIT Press, vol. 118(3), pages 815-842, August. [Downloadable!] (restricted)
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  13. Kapteyn, Arie, et al, 1997. "Interdependent Preferences: An Econometric Analysis," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(6), pages 665-86, Nov.-Dec.. [Downloadable!]
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Yann Bramoullé & Habiba Djebbari & Bernard Fortin, 2007. "Identification of Peer Effects through Social Networks," Cahiers de recherche 0705, CIRPEE. [Downloadable!]
    Other versions:
  2. Roméo Fontaine & Agnès Gramain & Jérôme Wittwer, 2009. "Providing care for an elderly parent: interactions among siblings?," Health Economics, John Wiley & Sons, Ltd., vol. 18(9), pages 1011-1029. [Downloadable!]
  3. repec:att:wimass:1920512 is not listed on IDEAS
  4. Steven N. Durlauf & Yannis M. Ioannides, 2009. "Social Interactions," Discussion Papers Series, Department of Economics, Tufts University 0739, Department of Economics, Tufts University. [Downloadable!]
  5. Shiko Maruyama, 2009. "Estimating Sequential-move Games by a Recursive Conditioning Simulator," Discussion Papers 2009-01, School of Economics, The University of New South Wales. [Downloadable!]
  6. Andrew E. Clark & Youenn Lohéac, 2005. ""It Wasn’t Me, It Was Them!" Social Influence in Risky Behavior by Adolescents," IZA Discussion Papers 1573, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  7. Schneeweis, Nicole & Winter-Ebmer, Rudolf, 2005. "Peer Effects in Austrian Schools," Economics Series 170, Institute for Advanced Studies. [Downloadable!]
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  8. Anindya Sen, 2009. "Estimating the impacts of household behavior on youth smoking: evidence from Ontario, Canada," Review of Economics of the Household, Springer, vol. 7(2), pages 189-218, June. [Downloadable!] (restricted)
  9. Ulf Böckenholt, 2006. "Thurstonian-Based Analyses: Past, Present, and Future Utilities," Psychometrika, Springer, vol. 71(4), pages 615-629, December. [Downloadable!] (restricted)
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