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Noise-adjusted turnover in estimated networks

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  • Sultan Amed
  • Sayantan Banerjee

Abstract

Economic networks are often estimated separately over two periods, and changes in their edge sets are interpreted as structural rewiring. Since both networks are estimated, observed turnover also reflects graph-selection error. We study the two-snapshot Hamming-turnover functional under a homogeneous edge-misclassification model. With known sensitivity and specificity and conditional independence of the estimated edge indicators across periods, latent turnover admits a closed-form unbiased adjustment based only on observed turnover and the two estimated graph sizes. We then examine the effects of sparsity, calibration error and dependence across periods. When the number of true links is proportional to $p$, a false-positive probability of order $p^{-1}$ generates expected spurious turnover of order $p$. An error of the same order in calibrating the false-positive probability can likewise leave order-$p$ bias after adjustment. We also derive the bias induced by cross-period dependence and give sufficient conditions for consistency relative to network size. Numerical results illustrate the finite-sample implications.

Suggested Citation

  • Sultan Amed & Sayantan Banerjee, 2026. "Noise-adjusted turnover in estimated networks," Papers 2609.20044, arXiv.org, revised Sep 2026.
  • Handle: RePEc:arx:papers:2609.20044
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    3. Jinyuan Chang & Eric D. Kolaczyk & Qiwei Yao, 2022. "Estimation of Subgraph Densities in Noisy Networks," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 117(537), pages 361-374, January.
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