Selection and Endogenous Treatment Models with Social Interactions: An Application to the Impact of Exercise on Self-Esteem

Zhongjian Lin () and Francis Vella
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Zhongjian Lin: Emory University

No 14167, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We address the estimation of sample selection and endogenous treatment models with social interactions. To model the interaction between individuals in an internally consistent matter we employ a game theoretic approach based on the use of a discrete Bayesian game. We overcome the substantial computational burden this introduces through a sequential version of the nested fixed point algorithm. We describe how our methodology can be applied to a large class of commonly employed models. We employ our approach to examine the impact of an individual's frequency of exercise on her level of self esteem in a setting where an individual's exercise frequency is treated as endogenous and is potentially influenced by her belief of her friends' exercise frequency.

Keywords: endogenous treatment; sample selection; social interactions; sequential estimation; exercise; self-esteem (search for similar items in EconPapers)
JEL-codes: C31 C34 C57 Z2 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2021-03
New Economics Papers: this item is included in nep-ore
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Citations: View citations in EconPapers (2)

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