Identification of peer effects using group size variation
This paper studies the econometric properties of a linear-in-means model of social interactions. Under a slightly more restrictive framework than Lee (2007), we show that this model is generally identified when at least three different sizes of peer groups are observed in the sample at hand. While unnecessary in general, homoscedasticity may be required in special cases, for instance when endogenous and exogenous peer effects cancel each other. We extend this analysis to the case where only binary outcomes are observed. Once more, most parameters are semiparametrically identified under weak conditions. However, identifying all of them requires more stringent assumptions, including a homoscedasticity condition. We also develop a parametric estimator for the binary case, which relies on the Geweke-Hajivassiliou-Keane (GHK) simulator. Monte Carlo simulations illustrate the influence of group sizes on the accuracy of the estimation, in line with the results obtained by Lee (2007). Copyright The Author(s). Journal compilation Royal Economic Society 2009
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 12 (2009)
Issue (Month): 3 (November)
|Contact details of provider:|| Postal: 2 Dean Trench Street, Westminster, SW1P 3HE|
Phone: +44 20 3137 6301
Web page: http://www.res.org.uk/
More information through EDIRC
|Order Information:||Web: http://www.ectj.org|
References listed on IDEAS
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.:
- Geweke, John, 1989. "Bayesian Inference in Econometric Models Using Monte Carlo Integration," Econometrica, Econometric Society, vol. 57(6), pages 1317-1339, November.
- Bryan S. Graham, 2008. "Identifying Social Interactions Through Conditional Variance Restrictions," Econometrica, Econometric Society, vol. 76(3), pages 643-660, May.
- De Martí, Joan & Zenou, Yves, 2009. "Social Networks," CEPR Discussion Papers 7599, C.E.P.R. Discussion Papers.
- Patrick Bayer & Christopher Timmins, 2007.
"Estimating Equilibrium Models Of Sorting Across Locations,"
Royal Economic Society, vol. 117(518), pages 353-374, March.
- Patrick Bayer & Christopher Timmins, 2003. "Estimating Equilibrium Models of Sorting across Locations," Working Papers 862, Economic Growth Center, Yale University.
- Patrick J. Bayer & Christopher D. Timmins, 2004. "Estimating Equilibrium Models of Sorting Across Locations," Yale School of Management Working Papers ysm415, Yale School of Management.
- Charles F. Manski, 1993.
"Identification of Endogenous Social Effects: The Reflection Problem,"
Review of Economic Studies,
Oxford University Press, vol. 60(3), pages 531-542.
- Manski, C.F., 1991. "Identification of Endogenous Social Effects: the Reflection Problem," Working papers 9127, Wisconsin Madison - Social Systems.
- 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.
- Bramoullé, Yann & Djebbari, Habiba & Fortin, Bernard, 2007. "Identification of Peer Effects through Social Networks," IZA Discussion Papers 2652, Institute for the Study of Labor (IZA).
- Yann Bramoullé & Habiba Djebbari & Bernard Fortin, 2007. "Identification of Peer Effects through Social Networks," Cahiers de recherche 0705, CIRPEE.
- Keane, Michael P, 1994. "A Computationally Practical Simulation Estimator for Panel Data," Econometrica, Econometric Society, vol. 62(1), pages 95-116, January.
- Joshua D. Angrist & Kevin Lang, 2004.
"Does School Integration Generate Peer Effects? Evidence from Boston's Metco Program,"
American Economic Review,
American Economic Association, vol. 94(5), pages 1613-1634, December.
- Angrist, Joshua & Lang, Kevin, 2004. "Does School Integration Generate Peer Effects? Evidence from Boston's Metco Program," IZA Discussion Papers 976, Institute for the Study of Labor (IZA).
- Pinkse, Joris & Slade, Margaret E., 1998. "Contracting in space: An application of spatial statistics to discrete-choice models," Journal of Econometrics, Elsevier, vol. 85(1), pages 125-154, July.
- Krauth, Brian V., 2006.
"Simulation-based estimation of peer effects,"
Journal of Econometrics,
Elsevier, vol. 133(1), pages 243-271, July.
- Susanne M. Schennach, 2004. "Estimation of Nonlinear Models with Measurement Error," Econometrica, Econometric Society, vol. 72(1), pages 33-75, January.
- Caroline Hoxby, 2000. "Peer Effects in the Classroom: Learning from Gender and Race Variation," NBER Working Papers 7867, National Bureau of Economic Research, Inc.
- William A. Brock & Steven N. Durlauf, 2001. "Discrete Choice with Social Interactions," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 235-260.
- Arthur Lewbel, 1997. "Constructing Instruments for Regressions with Measurement Error when no Additional Data are Available, with an Application to Patents and R&D," Econometrica, Econometric Society, vol. 65(5), pages 1201-1214, September.
- Edward P. Lazear, 2001. "Educational Production," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 777-803.
- Lewbel, Arthur, 2000. "Semiparametric qualitative response model estimation with unknown heteroscedasticity or instrumental variables," Journal of Econometrics, Elsevier, vol. 97(1), pages 145-177, July.
- Arthur Lewbel, 1999. "Semiparametric Qualitative Response Model Estimation with Unknown Heteroskedasticity or Instrumental Variables," Boston College Working Papers in Economics 454, Boston College Department of Economics.
- Joshua Herries & Daniel I. Rees & Jeffrey S. Zax, 2003. "Interdependence in worker productivity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(5), pages 585-604.
- Charles F. Manski, 2000. "Economic Analysis of Social Interactions," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 115-136, Summer.
- 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, Oxford University Press, vol. 118(3), pages 815-842.
- Esther Duflo & Emmanuel Saez, 2002. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," NBER Working Papers 8885, National Bureau of Economic Research, Inc.
- Esther Duflo & Emmanuel Saez, 2003. "The role of information and social interactions in retirement plan decisions: Evidence from a randomized experiment," Framed Field Experiments 00141, The Field Experiments Website.
- Brock, William A. & Durlauf, Steven N., 2007. "Identification of binary choice models with social interactions," Journal of Econometrics, Elsevier, vol. 140(1), pages 52-75, September.
- Brock,W.A. & Durlauf,S.N., 2004. "Identification of binary choice models with social interactions," Working papers 2, Wisconsin Madison - Social Systems.
- Manski, Charles F, 1987. "Semiparametric Analysis of Random Effects Linear Models from Binary Panel Data," Econometrica, Econometric Society, vol. 55(2), pages 357-362, March.
- Klier, Thomas & McMillen, Daniel P, 2008. "Clustering of Auto Supplier Plants in the United States," Journal of Business & Economic Statistics, American Statistical Association, vol. 26, pages 460-471.
- Lee, Lung-fei, 2007. "Identification and estimation of econometric models with group interactions, contextual factors and fixed effects," Journal of Econometrics, Elsevier, vol. 140(2), pages 333-374, October.
- 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.
- Case, Anne, 1992. "Neighborhood influence and technological change," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 491-508, September.
- Elie Tamer, 2003. "Incomplete Simultaneous Discrete Response Model with Multiple Equilibria," Review of Economic Studies, Oxford University Press, vol. 70(1), pages 147-165. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ect:emjrnl:v:12:y:2009:i:3:p:397-413. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.