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Testing unilateral and bilateral link formation

  • Margherita Comola

    (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris)

  • Marcel Fafchamps

    (Department of Economics - University of Oxford - University of Oxford)

We propose a test of whether self-reported network data is best seen as an actual link or willingness to link and, in the latter case, whether this link is generated by an unilateral or bilateral link formation process. We illustrate this test using survey answers to a risk-sharing question in an African village. We find that bilateral link formation fits the data better than unilateral link formation, but the data are best interpreted as willingness to link rather than an actual link. We then expand the model to include self-censoring and find it to fit the data significantly better than willingness to link. This suggests that, in our data, the data generating process behind self-reported links is a hybrid between an actual link and willingness to link.

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Paper provided by HAL in its series PSE Working Papers with number halshs-00574971.

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Date of creation: Dec 2009
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Handle: RePEc:hal:psewpa:halshs-00574971
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  1. Anderson, K.S. & Baland, J-M., 2000. "The Economics of Roscas and Intra-Household Resource Allocation," Discussion Paper 2000-83, Tilburg University, Center for Economic Research.
  2. Marcel Fafchamps & Susan Lund, 2000. "Risk-Sharing Networks in Rural Philippines," Economics Series Working Papers 10, University of Oxford, Department of Economics.
  3. Belot, Michèle & Francesconi, Marco, 2006. "Can Anyone Be “The” One? Evidence on Mate Selection from Speed Dating," IZA Discussion Papers 2377, Institute for the Study of Labor (IZA).
  4. COMOLA Margherita, 2007. "The network structure of informal arrangements : evidence from rural Tanzania," Research Unit Working Papers 0708, Laboratoire d'Economie Appliquee, INRA.
  5. Stefan Dercon & Joachim de Weerdt, 2004. "Risk-Sharing Networks And Insurance Against Illness," Development and Comp Systems 0409019, EconWPA.
  6. Platteau, J.P., 1996. "Traditional Sharing Norms as an Obstacle to Economic Growth in Tribal Societies," Papers 173, Notre-Dame de la Paix, Sciences Economiques et Sociales.
  7. Poirier, Dale J., 1980. "Partial observability in bivariate probit models," Journal of Econometrics, Elsevier, vol. 12(2), pages 209-217, February.
  8. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September.
  9. Jean-Paul Azam & Flore Gubert, 2006. "Migrants' Remittances and the Household in Africa: A Review of Evidence," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(2), pages 426-462, December.
  10. Abigail Barr & Mattea Stein, 2008. "Status and egalitarianism in traditional communities: An analysis of funeral attendance in six Zimbabwean villages," CSAE Working Paper Series 2008-26, Centre for the Study of African Economies, University of Oxford.
  11. Abigail Barr & Marleen Dekker & Marcel Fafchamps, 2008. "Risk Sharing Relations and Enforcement Mechanisms," CSAE Working Paper Series 2008-14, Centre for the Study of African Economies, University of Oxford.
  12. Siwan Anderson, 2000. "The Economics of Roscas and Intra-Household Resource Allocation," Econometric Society World Congress 2000 Contributed Papers 1323, Econometric Society.
  13. Garance Genicot & Debraj Ray, 2003. "Group Formation in Risk--Sharing Arrangements," Review of Economic Studies, Wiley Blackwell, vol. 70(1), pages 87-113, January.
  14. Fafchamps, Marcel & Gubert, Flore, 2007. "The formation of risk sharing networks," Journal of Development Economics, Elsevier, vol. 83(2), pages 326-350, July.
  15. Guenter Hitsch & Ali Hortacsu, 2005. "What Makes You Click? An Empirical Analysis of Online Dating," 2005 Meeting Papers 207, Society for Economic Dynamics.
  16. Bester, C. Alan & Conley, Timothy G. & Hansen, Christian B., 2011. "Inference with dependent data using cluster covariance estimators," Journal of Econometrics, Elsevier, vol. 165(2), pages 137-151.
  17. Arcand, Jean-Louis & Fafchamps, Marcel, 2012. "Matching in community-based organizations," Journal of Development Economics, Elsevier, vol. 98(2), pages 203-219.
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