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Identification of Peer Effects Using Group Size Variation

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  • Davezies, Laurent

    () (CREST)

  • D'Haultfoeuille, Xavier

    () (CREST)

  • Fougère, Denis

    () (Sciences Po, Paris)

Abstract

This paper considers the semiparametric identification of endogenous and exogenous peer effects based on group size variation. We show that Lee (2006)’s linear-in-means model is generically identified, even when all members of the group are not observed. While unnecessary in general, homoskedasticity may be required in special cases to recover all parameters. Extensions to asymmetric responses to peers and binary outcomes are also considered. Once more, most parameters are semiparametrically identified under weak conditions. However, recovering all of them requires more stringent assumptions. Eventually, we bring theoretical evidence that the model is more adapted to small groups.

Suggested Citation

  • Davezies, Laurent & D'Haultfoeuille, Xavier & Fougère, Denis, 2006. "Identification of Peer Effects Using Group Size Variation," IZA Discussion Papers 2324, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2324
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    References listed on IDEAS

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    Cited by:

    1. Vincent Boucher & Yann Bramoullé & Habiba Djebbari & Bernard Fortin, 2014. "Do Peers Affect Student Achievement? Evidence From Canada Using Group Size Variation," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(1), pages 91-109, January.
    2. ÖZGÜR, Onur & BISIN, Alberto, 2011. "Dynamic Linear Economies with Social Interactions," Cahiers de recherche 04-2011, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    3. Gonzalo Vazquez-Bare, 2017. "Identification and Estimation of Spillover Effects in Randomized Experiments," Papers 1711.02745, arXiv.org, revised May 2018.
    4. Qu, Xi & Lee, Lung-fei, 2012. "LM tests for spatial correlation in spatial models with limited dependent variables," Regional Science and Urban Economics, Elsevier, vol. 42(3), pages 430-445.
    5. Mohamed Amara & AbdelRahmen El Lahga, 2015. "A note on MAR and Jacobs externalities in the Tunisian manufacturing industries," Letters in Spatial and Resource Sciences, Springer, vol. 8(2), pages 151-167, July.
    6. Horrace, William C. & Liu, Xiaodong & Patacchini, Eleonora, 2016. "Endogenous network production functions with selectivity," Journal of Econometrics, Elsevier, vol. 190(2), pages 222-232.
    7. Alberto Bisin & Andrea Moro & Giorgio Topa, 2011. "The empirical content of models with multiple equilibria in economies with social interactions," Staff Reports 504, Federal Reserve Bank of New York.
    8. Lawrence E. Blume & William A. Brock & Steven N. Durlauf & Rajshri Jayaraman, 2015. "Linear Social Interactions Models," Journal of Political Economy, University of Chicago Press, vol. 123(2), pages 444-496.
    9. Bramoullé, Yann & Djebbari, Habiba & Fortin, Bernard, 2009. "Identification of peer effects through social networks," Journal of Econometrics, Elsevier, vol. 150(1), pages 41-55, May.
    10. Áureo de Paula, 2015. "Econometrics of network models," CeMMAP working papers CWP52/15, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    11. Boucher, Vincent & Fortin, Bernard, 2015. "Some Challenges in the Empirics of the Effects of Networks," IZA Discussion Papers 8896, Institute for the Study of Labor (IZA).
    12. Chi, Feng & Yang, Nathan, 2010. "Twitter Adoption in Congress: Who Tweets First?," MPRA Paper 23225, University Library of Munich, Germany.
    13. Giorgio Topa & Elizabeth Setren & Meta Brown, 2011. "Do Referrals Lead to Better Matches? Evidence from a Firm's Employee," 2011 Meeting Papers 711, Society for Economic Dynamics.
    14. Leonard, Tammy & McKillop, Caitlin & Carson, Jo Ann & Shuval, Kerem, 2014. "Neighborhood effects on food consumption," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 51(C), pages 99-113.
    15. Lucifora, Claudio & Tonello, Marco, 2012. "Students' Cheating as a Social Interaction: Evidence from a Randomized Experiment in a National Evaluation Program," IZA Discussion Papers 6967, Institute for the Study of Labor (IZA).
    16. Yaman, F., 2011. "Ethnic externalities and 2nd generation immigrants," Working Papers 11/08, Department of Economics, City University London.
    17. Amara Mohamed, 2014. "Gibrat's Law and peer group effect: the case of Tunisian small manufacturing companies," Economics Bulletin, AccessEcon, vol. 34(1), pages 373-384.
    18. Chandra Bhat, 2015. "A new spatial (social) interaction discrete choice model accommodating for unobserved effects due to endogenous network formation," Transportation, Springer, vol. 42(5), pages 879-914, September.
    19. repec:bla:presci:v:96:y:2017:i:3:p:627-645 is not listed on IDEAS
    20. Alexis Le Chapelain, 2014. "Market for Education and Student Achievement," Sciences Po publications info:hdl:2441/1jgbspo1909, Sciences Po.
    21. Tobias Stöhr, 2015. "Siblings’ interaction in migration decisions: who provides for the elderly left behind?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(3), pages 593-629, July.

    More about this item

    Keywords

    semiparametric identification; linear-in-means model; social interactions;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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