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Multinominal choice with social interactions: occupations in Victorian London

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  • Guerra, José Alberto
  • Mohnen, Myra

Abstract

We study the importance of social interactions on occupational choice in Victorian London using a multinomial choice model within an incomplete social network. Individuals form heterogeneous rational expectations about their peers’ behaviors, taking into account their characteristics and the strength of their ties. We show the conditions under which the endogenous, exogenous, and correlated effects can be identified and a unique equilibrium can be established, Using a novel data set, we proxy social groups by parish boundaries and strength of ties by geographic distances, Our results show the importance of the endogenous effects and reveal distinct effects by occupation.

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  • Guerra, José Alberto & Mohnen, Myra, 2022. "Multinominal choice with social interactions: occupations in Victorian London," LSE Research Online Documents on Economics 115715, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:115715
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    Cited by:

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    2. Julián Costas-Fernández & José-Alberto Guerra & Myra Mohnen, 2020. "Train to Opportunity: the Effect of Infrastructure on Intergenerational Mobility," Documentos CEDE 18591, Universidad de los Andes, Facultad de Economía, CEDE.
    3. Lambotte, Mathieu & Mathy, Sandrine & Risch, Anna & Treibich, Carole, 2023. "Disentangling peer effects in transportation mode choice: The example of active commuting," Journal of Environmental Economics and Management, Elsevier, vol. 121(C).

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