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Does the Rotten Child Spoil His Companion? Spatial Peer Effects Among Children in Rural India

  • Christian Helmers
  • Manasa Patnam

This paper identifies the effect of neighborhood peer groups on childhood skill acquisitions using observational data.� We incorporate spatial peer interaction, defined as a child's nearest geographical neighbors, into a prodiction function of child cognitive development in Andhra Pradesh, India.� Our peer group construction takes the form of directed networks, whose structure allows us to identify peer effects and enables us to disentangle endogenous effects from contextual effects.� We exploit variation over time to avoid confounding correlated with social effects.� Our results suggest that spatial peer and neighborhood effects are strongly positively associated with a child's cognitive skill formation.� These peer effects hold even when we consider an alternative IV-based identification strategy and different variations to network size.� Further, we find that the presence of peer groups helps provide insurance against the negative impact of idiosyncratic shocks to child learning.

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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number CSAE WPS/2010-13.

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Date of creation: 01 May 2010
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Handle: RePEc:oxf:wpaper:csae-wps/2010-13
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