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Endogenous peer effects: local aggregate or local average?

Author

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  • Liu, Xiaodong
  • Patacchini, Eleonora
  • Zenou, Yves

Abstract

We develop a unified model embedding different behavioral mechanisms of social interactions and design a statistical model selection test to differentiate between them in empirical applications. This framework is applied to study peer effects in education (effort in studying) and sport activities for adolescents in the United States. We find that, for education, students tend to conform to the social norm of their friends while, for sport activities, both the social multiplier and the social norm effect matter.

Suggested Citation

  • Liu, Xiaodong & Patacchini, Eleonora & Zenou, Yves, 2014. "Endogenous peer effects: local aggregate or local average?," Journal of Economic Behavior & Organization, Elsevier, vol. 103(C), pages 39-59.
  • Handle: RePEc:eee:jeborg:v:103:y:2014:i:c:p:39-59
    DOI: 10.1016/j.jebo.2014.03.025
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    References listed on IDEAS

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    Cited by:

    1. Jackson, Matthew O. & Zenou, Yves, 2015. "Games on Networks," Handbook of Game Theory with Economic Applications, Elsevier.
    2. Gibbons, Steve & Overman, Henry G. & Patacchini, Eleonora, 2015. "Spatial Methods," Handbook of Regional and Urban Economics, Elsevier.
    3. Youjin Hahn & Asadul Islam & Eleonora Patacchini & Yves Zenou, 2015. "Teams, Organization and Education Outcomes: Evidence from a field experiment in Bangladesh," Monash Economics Working Papers 35-15, Monash University, Department of Economics.
    4. repec:eee:regeco:v:69:y:2018:i:c:p:48-68 is not listed on IDEAS
    5. Topa, Giorgio & Zenou, Yves, 2015. "Neighborhood and Network Effects," Handbook of Regional and Urban Economics, Elsevier.
    6. Moizeau, Fabien, 2015. "Dynamics of social norms in the city," Regional Science and Urban Economics, Elsevier, vol. 51(C), pages 70-87.
    7. Frédéric Gavrel & Thérèse Rebière, 2015. "On the Equilibrium and Welfare Consequences of Keeping Up With The Joneses," Working Papers halshs-01158406, HAL.
    8. Boucher, Vincent, 2016. "Conformism and self-selection in social networks," Journal of Public Economics, Elsevier, vol. 136(C), pages 30-44.
    9. Sergey Kichko & Pierre M. Picard, 2018. "Heterogeneity in Conformism, Firm Selection, and Home Bias," CREA Discussion Paper Series 18-09, Center for Research in Economic Analysis, University of Luxembourg.
    10. Firth, Michael & Leung, Tak Yan & Rui, Oliver M. & Na, Chaohong, 2015. "Relative pay and its effects on firm efficiency in a transitional economy," Journal of Economic Behavior & Organization, Elsevier, vol. 110(C), pages 59-77.
    11. de Martí, Joan & Zenou, Yves, 2015. "Network games with incomplete information," Journal of Mathematical Economics, Elsevier, vol. 61(C), pages 221-240.
    12. Battaglini, Marco & Díaz, Carlos & Patacchini, Eleonora, 2017. "Self-control and peer groups: An empirical analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 240-254.
    13. Chen, Ying-Ju & Zenou, Yves & Zhou, Junjie, 2015. "Multiple Activities for Socially-Connected Criminals," CEPR Discussion Papers 10709, C.E.P.R. Discussion Papers.
    14. Debarsy, Nicolas & LeSage, James, 2018. "Flexible dependence modeling using convex combinations of different types of connectivity structures," Regional Science and Urban Economics, Elsevier, vol. 69(C), pages 48-68.
    15. Dogan, Osman & Taspinar, Suleyman & Bera, Anil K., 2017. "Simple Tests for Social Interaction Models with Network Structures," MPRA Paper 82828, University Library of Munich, Germany.
    16. Yann Algan & Quoc-Anh Do & Nicolò Dalvit & Alexis Le Chapelain & Yves Zenou, 2015. "How Social Networks Shape Our Beliefs: A Natural Experiment among Future French Politicians," Sciences Po publications info:hdl:2441/78vacv4udu9, Sciences Po.
    17. repec:eee:regeco:v:67:y:2017:i:c:p:135-147 is not listed on IDEAS
    18. Hsieh, Chih-Sheng & Lee, Lung fei, 2017. "Specification and Estimation of Network Formation and Network Interaction Models with the Exponential Probability Distribution," MPRA Paper 60726, University Library of Munich, Germany.
    19. Chih-Sheng Hsieh & Hans van Kippersluis, 2015. "Smoking Initiation: Peers and Personality," Tinbergen Institute Discussion Papers 15-093/V, Tinbergen Institute.

    More about this item

    Keywords

    Social networks; Identification of peer effects; J test; Individual-based policy; Group-based policy;

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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