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Structural Homophily

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  • Vincent Boucher

Abstract

Homophily, or the fact that similar individuals tend to interact with each other, is a prominent feature of economic and social networks. I show that the equilibrium structure of homophily has empirical power. I build a strategic model of network formation, which produces a unique equilibrium network. Individuals have homophilic preferences and face capacity constraints on the number of links. I develop a novel empirical method, based on the shape of the equilibrium network, which allows for the identification and estimation of the underlying homophilic preferences. I apply this new methodology to the formation of friendship networks.

Suggested Citation

  • Vincent Boucher, 2015. "Structural Homophily," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(1), pages 235-264, February.
  • Handle: RePEc:wly:iecrev:v:56:y:2015:i:1:p:235-264
    DOI: 10.1111/iere.12101
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    Cited by:

    1. Simon Clark, 2020. ""You're Just My Type!" Matching and Payoffs When Like Attracts Like," Edinburgh School of Economics Discussion Paper Series 295, Edinburgh School of Economics, University of Edinburgh.
    2. Vincent Boucher & Bernard Fortin, 2015. "Some Challenges in the Empirics of the Effects of Networks," Cahiers de recherche 1504, CIRPEE.
    3. Boucher, Vincent & Tumen, Semih & Vlassopoulos, Michael & Wahba, Jackline & Zenou, Yves, 2021. "Ethnic Mixing in Early Childhood: Evidence from a Randomized Field Experiment and a Structural Model," IZA Discussion Papers 14260, Institute of Labor Economics (IZA).
    4. Michael Foley & Rory Smead & Patrick Forber & Christoph Riedl, 2021. "Avoiding the bullies: The resilience of cooperation among unequals," PLOS Computational Biology, Public Library of Science, vol. 17(4), pages 1-18, April.
    5. Bolletta, Ugo, 2021. "A model of peer effects in school," Mathematical Social Sciences, Elsevier, vol. 114(C), pages 1-10.
    6. Schulz, Jan & Mayerhoffer, Daniel M., 2021. "A network approach to consumption," BERG Working Paper Series 173, Bamberg University, Bamberg Economic Research Group.

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