Identification of Peer Effects Using Group Size Variation

Laurent Davezies, Xavier D'Haultfoeuille and Denis Fougere

No 2324, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper considers the semiparametric identification of endogenous and exogenous peer effects based on group size variation. We show that Lee (2006)’s linear-in-means model is generically identified, even when all members of the group are not observed. While unnecessary in general, homoskedasticity may be required in special cases to recover all parameters. Extensions to asymmetric responses to peers and binary outcomes are also considered. Once more, most parameters are semiparametrically identified under weak conditions. However, recovering all of them requires more stringent assumptions. Eventually, we bring theoretical evidence that the model is more adapted to small groups.

Keywords: semiparametric identification; linear-in-means model; social interactions (search for similar items in EconPapers)
JEL-codes: C14 C21 C25 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2006-09
New Economics Papers: this item is included in nep-cdm, nep-ecm, nep-net, nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - published in: Econometrics Journal, 2009, 12 (3), 397-413

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Related works:
Journal Article: Identification of peer effects using group size variation (2009)
Working Paper: Identification of Peer Using Group Size Variation (2007)
Working Paper: Identification of Peer Effects Using Group Size Variation (2006)
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