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Peer Effects in Networks: A Survey

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  • Bramoullé, Yann

    () (Laval University)

  • Djebbari, Habiba

    () (Aix-Marseille University)

  • Fortin, Bernard

    () (Université Laval)

Abstract

We survey the recent, fast-growing literature on peer effects in networks. An important recurring theme is that the causal identification of peer effects depends on the structure of the network itself. In the absence of correlated effects, the reflection problem is generally solved by network interactions even in non-linear, heterogeneous models. By contrast, microfoundations are generally not identified. We discuss and assess the various approaches developed by economists to account for correlated effects and network endogeneity in particular. We classify these approaches in four broad categories: random peers, random shocks, structural endogeneity and panel data. We review an emerging literature relaxing the assumption that the network is perfectly known. Throughout, we provide a critical reading of the existing literature and identify important gaps and directions for future research.

Suggested Citation

  • Bramoullé, Yann & Djebbari, Habiba & Fortin, Bernard, 2020. "Peer Effects in Networks: A Survey," IZA Discussion Papers 12947, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp12947
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    1. Vincent Boucher & Yann Bramoullé, 2020. "Binary Outcomes and Linear Interactions," AMSE Working Papers 2038, Aix-Marseille School of Economics, France.

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    More about this item

    Keywords

    assimilation; immigrant health advantage; ethnic attrition;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

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