Uncovering heterogeneous social effects in binary choices

Zhongjian Lin, Xun Tang and Ning Neil Yu

Journal of Econometrics, 2021, vol. 222, issue 2, 959-973

Abstract: We identify and estimate heterogeneous social effects within groups of individuals that make binary choices. These heterogeneous social effects, which include peer and contextual effects, are modeled through unobserved influence matrices that summarize how the members within each group affect each other’s outcomes. We recover parameters in social effects as well as the unknown influence matrices by exploiting how these matrices are linked to the reduced-form effects of multiple characteristics. Monte Carlo experiments show that a nested fixed-point maximum-likelihood estimator for the social effects has good finite-sample performance. Using a new dataset, we analyze how college roommates influence each other’s decisions to participate in volunteering activities. Our estimates reveal substantial heterogeneity in the social effects among these students.

Keywords: Heterogeneous social effect; Peer effect; Exclusion restriction; Binary choice; Volunteering (search for similar items in EconPapers)
JEL-codes: A22 C31 C35 C57 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304407620303080
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:econom:v:222:y:2021:i:2:p:959-973

DOI: 10.1016/j.jeconom.2020.08.005

Access Statistics for this article

Journal of Econometrics is currently edited by T. Amemiya, A. R. Gallant, J. F. Geweke, C. Hsiao and P. M. Robinson

More articles in Journal of Econometrics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().