Identification of Peer Effects through Social Networks

Yann Bramoullé (), Habiba Djebbari () and Bernard Fortin ()
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Habiba Djebbari: CIRPÉE, Université Laval and IZA

No 2652, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: We provide new results regarding the identification of peer effects. We consider an extended version of the linear-in-means model where each individual has his own specific reference group. Interactions are thus structured through a social network. We assume that correlated unobservables are either absent, or treated as fixed effects at the component level. In both cases, we provide easy-to-check necessary and sufficient conditions for identification. We show that endogenous and exogenous effects are generally identified under network interaction, although identification may fail for some particular structures. Monte Carlo simulations provide an analysis of the effects of some crucial characteristics of a network (i.e., density, intransitivity) on the estimates of social effects. Our approach generalizes a number of previous results due to Manski (1993), Moffitt (2001), and Lee (2006).

Keywords: peer effects; social networks; identification (search for similar items in EconPapers)
JEL-codes: D85 L14 Z13 C3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ecm, nep-net, nep-soc and nep-ure
Date: 2007-03
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Related works:
Working Paper: Identification of Peer Effects through Social Networks (2007)
Journal Article: Identification of peer effects through social networks (2009)
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