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The Determinants and Consequences of Friendship Composition

  • Jason M. Fletcher
  • Stephen L. Ross
  • Yuxiu Zhang

This paper examines the demographic pattern of friendship links among youth and the impact of those patterns on own educational outcomes using the friendship network data in the Add Health. We develop and estimate a reduced form matching model to predict friendship link formation and identify the parameters based on across-cohort, within school variation in the "supply" of potential friends. Our model provides novel evidence on the impact of small changes in peer demographic composition on the pattern of friendship links. The evidence suggests, for example, that increases in the share of African-American or Hispanic students leads to reductions in the incidence of cross race friendships. We then use the predicted friendship links from the model in an instrumental variable analysis of the effects of friends' socioeconomic status, as measured by parental education, on own grade point average outcomes. Although the conditional correlation between friendship composition and grade point average suggests large associations between friends' characteristics and own grades, this effect is robust only for females in the instrumental variable analysis. We then present evidence that the GPA effects are driven by science and English grades and a mechanism is likely through non-cognitive factors.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19215.

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Date of creation: Jul 2013
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Handle: RePEc:nbr:nberwo:19215
Note: CH ED HE LS
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  1. Coralio Ballester & Antoni Calvo-Armengol & Yves Zenou, 2005. "Who's Who in Networks. Wanted: the Key Player," NajEcon Working Paper Reviews 666156000000000586, www.najecon.org.
  2. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2013. "Under Pressure? The Effect of Peers on Outcomes of Young Adults," Journal of Labor Economics, University of Chicago Press, vol. 31(1), pages 119 - 153.
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  4. Robert Bifulco & Jason M. Fletcher & Stephen L. Ross, 2011. "The Effect of Classmate Characteristics on Post-secondary Outcomes: Evidence from the Add Health," American Economic Journal: Economic Policy, American Economic Association, vol. 3(1), pages 25-53, February.
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  10. Victor Lavy & Analía Schlosser, 2007. "Mechanisms and Impacts of Gender Peer Effects at School," NBER Working Papers 13292, National Bureau of Economic Research, Inc.
  11. Steven Goodreau & James Kitts & Martina Morris, 2009. "Birds of a feather, or friend of a friend? using exponential random graph models to investigate adolescent social networks," Demography, Springer, vol. 46(1), pages 103-125, February.
  12. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," NBER Working Papers 7580, National Bureau of Economic Research, Inc.
  13. Stephen B. Billings & David J. Deming & Jonah E. Rockoff, 2012. "School Segregation, Educational Attainment and Crime: Evidence from the end of busing in Charlotte-Mecklenburg," NBER Working Papers 18487, National Bureau of Economic Research, Inc.
  14. Jonathan Guryan & Kory Kroft & Matthew J. Notowidigdo, 2009. "Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments," American Economic Journal: Applied Economics, American Economic Association, vol. 1(4), pages 34-68, October.
  15. Mayer, Adalbert & Puller, Steven L., 2008. "The old boy (and girl) network: Social network formation on university campuses," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 329-347, February.
  16. Raymond Fisman & Sheena S. Iyengar & Emir Kamenica & Itamar Simonson, 2008. "Racial Preferences in Dating," Review of Economic Studies, Oxford University Press, vol. 75(1), pages 117-132.
  17. 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.
  18. Babcock, Phillip, 2008. "From Ties to Gains? Evidence on Connectedness and Human Capital Acquisition," University of California at Santa Barbara, Economics Working Paper Series qt6fw1m0x0, Department of Economics, UC Santa Barbara.
  19. Robert Haveman & Barbara Wolfe, 1995. "The Determinants of Children's Attainments: A Review of Methods and Findings," Journal of Economic Literature, American Economic Association, vol. 33(4), pages 1829-1878, December.
  20. Anil Nathan, 2008. "The Effects of Racial and Extracurricular Friendship Diversity on Achievement," Working Papers 0816, College of the Holy Cross, Department of Economics.
  21. Scott E. Carrell & Bruce I. Sacerdote & James E. West, 2013. "From Natural Variation to Optimal Policy? The Importance of Endogenous Peer Group Formation," Econometrica, Econometric Society, vol. 81(3), pages 855-882, 05.
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