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Estimating Peer Effects on Career Choice: A Spatial Multinomial Logit Approach

Bolun Li, Robin C. Sickles and Jenny Williams
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Bolun Li: Rice U
Robin C. Sickles: Rice U
Jenny Williams: U of Melbourne

Working Papers from Rice University, Department of Economics

Abstract: Peers and friends are among the most influential social forces affecting adolescent behavior. In this paper we investigate peer effects on post-high school career decisions and on school choice. We define peers as students who are in the same classes and social clubs and measure peer effects as spatial dependence among them. Utilizing recent development in spatial econometrics, we formalize a spatial multinomial choice model in which individuals are spatially dependent in their preferences. We estimate the model with data from the Texas Higher Education Opportunity Project. We do find that individuals are positively correlated in their career and college preferences and examine how such dependencies impact decisions directly and indirectly as peer effects are allowed to reverberate through the social network in which students reside.

JEL-codes: C31 C35 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm, nep-geo, nep-soc and nep-ure
Date: 2019-01
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Handle: RePEc:ecl:riceco:19-001