Identification of Peer Effects Using Group Size Variation

Laurent Davezies, Xavier d’Haultfoeuille () and Denis Fougere ()
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Xavier d’Haultfoeuille: ENSAE, CREST-INSEE and Université Paris I-Panthéon-Sorbonne
Authors registered in the RePEc Author Service: Xavier D'Haultfoeuille

No 2324, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: This paper considers the semiparametric identification of endogenous and exogenous peer effects based on group size variation. We show that Lee (2006)’s linear-in-means model is generically identified, even when all members of the group are not observed. While unnecessary in general, homoskedasticity may be required in special cases to recover all parameters. Extensions to asymmetric responses to peers and binary outcomes are also considered. Once more, most parameters are semiparametrically identified under weak conditions. However, recovering all of them requires more stringent assumptions. Eventually, we bring theoretical evidence that the model is more adapted to small groups.

Keywords: social interactions; linear-in-means model; semiparametric identification (search for similar items in EconPapers)
JEL-codes: C14 C21 C25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-ecm, nep-net, nep-soc and nep-ure
Date: 2006-09
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Related works:
Working Paper: Identification of Peer Effects Using Group Size Variation (2006)
Working Paper: Identification of Peer Using Group Size Variation
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