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Estimation of Peer Effects in Endogenous Social Networks: Control Function Approach

Ida Johnsson, Hyungsik Roger Moon

arXiv 28 Sep 2017 · Econometrics · publishedThe Review of Economics and Statistics (2019) · 24 citations (OpenAlex)

arXiv:1709.10024 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We propose a method of estimating the linear-in-means model of peer effects in which the peer group, defined by a social network, is endogenous in the outcome equation for peer effects. Endogeneity is due to unobservable individual characteristics that influence both link formation in the network and the outcome of interest. We propose two estimators of the peer effect equation that control for the endogeneity of the social connections using a control function approach. We leave the functional form of the control function unspecified and treat it as unknown. To estimate the model, we use a sieve semiparametric approach, and we establish asymptotics of the semiparametric estimator.

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Bramoullé, Y., H. Djebbari, and B. Fortin (2009) Identification of peer effects through social networks1.00063100%
2Graham, B. S (2017) An econometric model of network formation with degree heterogeneity0.97112592%
3Auerbach, E (2016) Identification and estimation of models with endogenous network formation0.87492100%
4Arduini, T., E. Patacchini, E. Rainone, et al (2015) Parametric and semiparametric iv estimation of network models with selectivity0.87462100%
5Qu, X. and L.-F. Lee (2015) Estimating a spatial autoregressive model with an endogenous spatial weight matrix0.87452100%
6Goldsmith-Pinkham, P. and G. W. Imbens (2013) Social Networks and the Identification of Peer Effects0.81142100%
7Kelejian, H. H. and I. R. Prucha (1998) A generalized spatial two-stage least squares procedure for estimating a spatial autoregressive model with autoregressive distur…0.81142100%
8Lee, L (2003) Best Spatial Two‐Stage Least Squares Estimators for a Spatial Autoregressive Model with Autoregressive Disturbances0.81142100%
9Manski, C. F (1993) Identification of endogenous social effects: The reflection problem0.81142100%
10Hsieh, C.-S. and L. F. Lee (2016) A social interactions model with endogenous friendship formation and selectivity0.81142100%

Showing the top 10 of 107 scored citations.

Cited by, within the corpus

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Citing paperIntensityMentionsSections
1The Network Propensity Score: Spillovers, Homophily, and Selection into Treatment1.00065
2Recidivism and Peer Influence with LLM Text Embeddings in Low Security Correctional Facilities0.928204
3Social Interactions in Endogenous Groups0.92843
4PEER EFFECTS AND ENDOGENOUS SOCIAL INTERACTIONS0.87462
51 Identification and Estimation of a Partially Linear Regression Model using Network Data: Inference and an Application to Network Peer Effects0.73732
6Heterogeneous Peer Effects with Endogenous Network Formation0.73732
71Identification and Estimation of a Partially Linear Regression Model using Network Data0.64422
8Network Data0.64422
9Improving control over unobservables with network data0.64422
10Treatment Effect Models with Strategic Interaction in Treatment Decisions0.40511