Nonparametric identification in index models of link formation

Wayne Yuan Gao

Journal of Econometrics, 2020, vol. 215, issue 2, 399-413

Abstract: We consider a dyadic link formation model with a homophily effect index and a degree heterogeneity index. We provide nonparametric identification results for the potentially nonparametric homophily effect function, the realizations of unobserved individual fixed effects and the unknown distribution of idiosyncratic shocks, up to normalization. We propose a novel form of scale normalization on an arbitrary interquantile range, which is not only theoretically general but also proves particularly convenient for the identification analysis. We then use an inductive “in-fill and out-expansion” algorithm to establish our main results.

Keywords: Network formation; Homophily; Degree heterogeneity; Nonparametric identification; Interquantile range (search for similar items in EconPapers)
JEL-codes: C14 C18 C31 D85 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:econom:v:215:y:2020:i:2:p:399-413

DOI: 10.1016/j.jeconom.2019.09.005

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