Peer Effects and Multiple Equilibria in the Risky Behavior of Friends
We study social interactions in the risky behavior of best-friend pairs in the National Longitudinal Study of Adolescent Health (Add Health). Focusing on friends who had not yet initiated a particular behavior (sex, smoking, marijuana use, truancy) by the first wave of the survey, we estimate bivariate discrete choice models for their subsequent decisions that include peer effects and unobserved heterogeneity. Social interactions can lead to multiple equilibria in friends' choices: we consider simple equilibrium selection models as well as partial likelihood models that remain agnostic about the choice of equilibrium. Our identification strategy assumes that there is at least one individual characteristic (e.g., physical development) that does not directly affect a friend's propensity to engage in a risky activity. Our estimates suggest that patterns of initiation of risky behavior by adolescent friends exhibit significant interaction effects. The likelihood that one friend initiates intercourse within a year of the baseline interview increases by 4 percentage points (on a base of 14%) if the other also initiates intercourse, holding constant family and individual factors. Similar effects are also present for smoking, marijuana use, and truancy. We find larger peer effects for females and for pairs that are more likely to remain best friends after a year. We also find important asymmetries in the strength of the peer effects in non-reciprocated friendships.
|Date of creation:||May 2011|
|Date of revision:|
|Publication status:||published as David Card & Laura Giuliano, 2013. "Peer Effects and Multiple Equilibria in the Risky Behavior of Friends," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1130-1149, October.|
|Contact details of provider:|| Postal: |
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Bramoullé, Yann & Djebbari, Habiba & Fortin, Bernard, 2007. "Identification of Peer Effects through Social Networks," IZA Discussion Papers 2652, Institute for the Study of Labor (IZA).
- Yann Bramoullé & Habiba Djebbari & Bernard Fortin, 2007. "Identification of Peer Effects through Social Networks," Cahiers de recherche 0705, CIRPEE.
- Giacomo De Giorgi & Michele Pellizzari & Silvia Redaelli, 2010. "Identification of Social Interactions through Partially Overlapping Peer Groups," American Economic Journal: Applied Economics, American Economic Association, vol. 2(2), pages 241-75, April.
- Patrick Bajari & Han Hong & Stephen Ryan, 2004.
"Identification and Estimation of Discrete Games of Complete Information,"
NBER Technical Working Papers
0301, National Bureau of Economic Research, Inc.
- Stephen Ryan & Patrick Bajari & Han Hong, 2005. "Identification and Estimation of Discrete Games of Complete Information," Computing in Economics and Finance 2005 53, Society for Computational Economics.
- Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
- Elie Tamer & Federico Ciliberto, 2004.
"Market Structure and Multiple Equilibria in Airline Markets,"
Econometric Society 2004 North American Winter Meetings
517, Econometric Society.
- Federico Ciliberto & Elie Tamer, 2009. "Market Structure and Multiple Equilibria in Airline Markets," Econometrica, Econometric Society, vol. 77(6), pages 1791-1828, November.
- Elie Tamer & Federico Ciliberto, 2004. "Market Structure and Multiple Equilibria in Airline Markets," 2004 Meeting Papers 52, Society for Economic Dynamics.
- Ciliberto, Federico & Tamer, Elie, 2009. "Market structure and multiple equilibria in airline markets," MPRA Paper 38635, University Library of Munich, Germany.
- Bresnahan, Timothy F. & Reiss, Peter C., 1991. "Empirical models of discrete games," Journal of Econometrics, Elsevier, vol. 48(1-2), pages 57-81.
- Kooreman, Peter & Soetevent, Adriaan, 2002. "A discrete choice model with social interactions: an analysis of high school teen behavior," CCSO Working Papers 200214, University of Groningen, CCSO Centre for Economic Research.
- Elie Tamer, 2003. "Incomplete Simultaneous Discrete Response Model with Multiple Equilibria," Review of Economic Studies, Wiley Blackwell, vol. 70(1), pages 147-165, January.
- Scott E. Carrell & Richard L. Fullerton & James E. West, 2008.
"Does Your Cohort Matter? Measuring Peer Effects in College Achievement,"
NBER Working Papers
14032, National Bureau of Economic Research, Inc.
- Scott E. Carrell & Richard L. Fullerton & James E. West, 2009. "Does Your Cohort Matter? Measuring Peer Effects in College Achievement," Journal of Labor Economics, University of Chicago Press, vol. 27(3), pages 439-464, 07.
- Huang, Ching-I, 2008.
"Intra-Household Effects on Demand for Telephone Service: Empirical Evidence,"
6813, University Library of Munich, Germany.
- Ching-I Huang, 2013. "Intra-household effects on demand for telephone service: Empirical evidence," Quantitative Marketing and Economics, Springer, vol. 11(2), pages 231-261, June.
- Brian Krauth, 2004.
"Simulation-based estimation of peer effects,"
- Scott E. Carrell & Bruce I. Sacerdote & James E. West, 2011. "From Natural Variation to Optimal Policy? The Lucas Critique Meets Peer Effects," NBER Working Papers 16865, National Bureau of Economic Research, Inc.
- Halliday, Timothy J. & Kwak, Sally, 2008.
"Weight Gain in Adolescents and Their Peers,"
IZA Discussion Papers
3610, Institute for the Study of Labor (IZA).
- David J. Zimmerman, 2003.
"Peer Effects in Academic Outcomes: Evidence from a Natural Experiment,"
The Review of Economics and Statistics,
MIT Press, vol. 85(1), pages 9-23, February.
- Zimmerman, David J., 1999. "Peer Effects in Academic Outcomes: Evidence From a Natural Experiment," Williams Project on the Economics of Higher Education DP-52, Department of Economics, Williams College.
- Krauth, Brian V., 2007.
"Peer and Selection Effects on Youth Smoking in California,"
Journal of Business & Economic Statistics,
American Statistical Association, vol. 25, pages 288-298, July.
- Brian Krauth, 2004. "Peer and selection effects on youth smoking in California," HEW 0408002, EconWPA.
- Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2000.
"Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools,"
NBER Working Papers
7831, National Bureau of Economic Research, Inc.
- Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
- Roland G. Fryer, Jr. & Paul Torelli, 2005. "An Empirical Analysis of 'Acting White'," NBER Working Papers 11334, National Bureau of Economic Research, Inc.
- Stinebrickner, Ralph & Stinebrickner, Todd R., 2006.
"What can be learned about peer effects using college roommates? Evidence from new survey data and students from disadvantaged backgrounds,"
Journal of Public Economics,
Elsevier, vol. 90(8-9), pages 1435-1454, September.
- Todd R. Stinebrickner & Ralph Stinebrickner, 2005. "What Can Be Learned About Peer Effects Using College Roommates? Evidence From New Survey Data and Students from Disadvantaged Backgrounds," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20054, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
- Laura M. Argys & Daniel I. Rees, 2008. "Searching for Peer Group Effects: A Test of the Contagion Hypothesis," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 442-458, August.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:17088. 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: ()
If references are entirely missing, you can add them using this form.