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Resolving the Identification Problem in Linear Social Interactions Models: Modeling with Between-Group Spillovers

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  • Ethan Cohen-Cole

    (University of Wisconsin - Madison)

Abstract

The linear-in-means model has been a theoretical and empirical workhorse of the social interactions field. As was noted by Manski (1993), the collinearity between group-level 'contextual' and 'endogenous' effects leads to an inability to identify the structural parameters of this model. Manski called this the 'reflection' problem. This paper suggests that Manksi’s reflection problem is unique to a special case of a more general context in which agents care about multiple reference groups. Specifically, the identification problem is resolved through a model generalization to include between-group and within-group effects.

Suggested Citation

  • Ethan Cohen-Cole, 2005. "Resolving the Identification Problem in Linear Social Interactions Models: Modeling with Between-Group Spillovers," Others 0501001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpot:0501001
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    References listed on IDEAS

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    Cited by:

    1. Fortin, Bernard & Lacroix, Guy & Villeval, Marie-Claire, 2007. "Tax evasion and social interactions," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2089-2112, December.

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    More about this item

    Keywords

    Social Interactions; Identification; Linear-in- Means Model;
    All these keywords.

    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
    • D10 - Microeconomics - - Household Behavior - - - General

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