IDEAS home Printed from https://ideas.repec.org/p/mnh/vpaper/1043.html
   My bibliography  Save this paper

Social Interactions - Is There Really an Identification Problem?

Author

Listed:
  • Kalckreuth, Ulf von

Abstract

It is an everyday experience that the behavior of individuals belonging to the same social group tends to be correlated. In his seminal work, Manski differentiates two basic types of feedback between group and individual and he maintains that it is not possible to discriminate between the two by mere observation. What is more: Only under very favorable conditions can social effects be distinguished from other reasons for correlations within social groups, such as selectivity. Manski's forceful critique challenges not only the numerous empirical efforts to understand the nature of social interactions. In the light of his arguments many theoretical disputes in the social sciences suddenly appear to be rather futile. Thus, a further analysis of his position seems well justified. The result is quite encouraging. Manski himself renders the solution to his identification problem impossible by imposing a very special assumption. In his econometric model, social effects do not flow from the outcomes realized within the group, but from their respective conditional mathematical expectations. By substituting this critical assumption by a more realistic formulation, a fully identified model is obtained. For this modified model, FIML estimators of all parameters are explicitly derived. The new estimator allows to differentiate clearly between endogenous social effects, exogenous social effects and correlated effects.

Suggested Citation

  • Kalckreuth, Ulf von, 1999. "Social Interactions - Is There Really an Identification Problem?," Discussion Papers 567, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
  • Handle: RePEc:mnh:vpaper:1043
    as

    Download full text from publisher

    File URL: https://ub-madoc.bib.uni-mannheim.de/1043/1/567.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. George J. Borjas, 1992. "Ethnic Capital and Intergenerational Mobility," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 123-150.
    2. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Oxford University Press, vol. 60(3), pages 531-542.
    3. Case, Anne C, 1991. "Spatial Patterns in Household Demand," Econometrica, Econometric Society, vol. 59(4), pages 953-965, July.
    4. Goldberger, Arthur S, 1972. "Structural Equation Methods in the Social Sciences," Econometrica, Econometric Society, vol. 40(6), pages 979-1001, November.
    5. Rauch James E., 1993. "Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities," Journal of Urban Economics, Elsevier, vol. 34(3), pages 380-400, November.
    6. Roland BĂ©nabou, 1996. "Equity and Efficiency in Human Capital Investment: The Local Connection," Review of Economic Studies, Oxford University Press, vol. 63(2), pages 237-264.
    7. Durlauf, Steven N, 1996. "A Theory of Persistent Income Inequality," Journal of Economic Growth, Springer, vol. 1(1), pages 75-93, March.
    8. Anne C. Case & Lawrence F. Katz, 1991. "The Company You Keep: The Effects of Family and Neighborhood on Disadvantaged Youths," NBER Working Papers 3705, National Bureau of Economic Research, Inc.
    9. William H. Sewell & Robert M. Hauser, 1972. "Causes and Consequences of Higher Edueation: Models of the Status Attainment Process," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(5), pages 851-861.
    10. Alessie, Rob & Kapteyn, Arie, 1991. "Habit Formation, Interdependent References and Demographic Effects in the Almost Ideal Demand System," Economic Journal, Royal Economic Society, vol. 101(406), pages 404-419, May.
    11. Griliches, Zvi, 1974. "Errors in Variables and Other Unobservables," Econometrica, Econometric Society, vol. 42(6), pages 971-998, November.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mnh:vpaper:1043. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Katharina Rautenberg). General contact details of provider: http://edirc.repec.org/data/ivmande.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.