Identification of Social Interactions through Partially Overlapping Peer Groups

Giacomo De Giorgi, Michele Pellizzari and Silvia Redaelli

American Economic Journal: Applied Economics, 2010, vol. 2, issue 2, 241-75

Abstract: In this paper, we demonstrate that, in a context where peer groups do not overlap fully, it is possible to identify all the relevant parameters of the standard linear-in-means model of social interactions. We apply this novel identification structure to study peer effects in the choice of college major. Results show that one is more likely to choose a major when many of her peers make the same choice. We also show that peers can divert students from majors in which they have a relative ability advantage, with adverse consequences on academic performance, entry wages, and job satisfaction. (JEL I23, J24, J31, Z13)

JEL-codes: I23 J24 J31 Z13 (search for similar items in EconPapers)
Date: 2010
Note: DOI: 10.1257/app.2.2.241
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Citations: View citations in EconPapers (327)

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