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Estimating Peer Effects on Career Choice: A Spatial Multinomial Logit Approach

Author

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  • Li, Bolun

    (Rice U)

  • Sickles, Robin C.

    (Rice U)

  • Williams, Jenny

    (U of Melbourne)

Abstract

Peers and friends are among the most influential social forces affecting adolescent behavior. In this paper we investigate peer effects on post-high school career decisions and on school choice. We define peers as students who are in the same classes and social clubs and measure peer effects as spatial dependence among them. Utilizing recent development in spatial econometrics, we formalize a spatial multinomial choice model in which individuals are spatially dependent in their preferences. We estimate the model with data from the Texas Higher Education Opportunity Project. We do find that individuals are positively correlated in their career and college preferences and examine how such dependencies impact decisions directly and indirectly as peer effects are allowed to reverberate through the social network in which students reside.

Suggested Citation

  • Li, Bolun & Sickles, Robin C. & Williams, Jenny, 2019. "Estimating Peer Effects on Career Choice: A Spatial Multinomial Logit Approach," Working Papers 19-001, Rice University, Department of Economics.
    • Handle: RePEc:ecl:riceco:19-001
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    1. Weili Ding & Steven F. Lehrer, 2007. "Do Peers Affect Student Achievement in China's Secondary Schools?," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 300-312, May.
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    More about this item

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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