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Social Interactions in Endogenous Groups

Shuyang Sheng, Xiaoting Sun

arXiv 2 Jun 2023 · Econometrics

arXiv:2306.01544 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper investigates social interactions in endogenous groups. We specify a two-sided many-to-one matching model, where individuals select groups based on preferences, while groups admit individuals based on qualifications until reaching capacities. Endogenous formation of groups leads to selection bias in peer effect estimation, which is complicated by equilibrium effects and alternative groups. We propose novel methods to simplify selection bias and develop a sieve OLS estimator for peer effects that is \sqrt{n}-consistent and asymptotically normal. Using Chilean data, we find that ignoring selection into high schools leads to overestimated peer influence and distorts the estimation of school effectiveness.

Citation extraction

85
references
203
in-text mentions
85
distinct cited
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self-citations
48,771
main-text words

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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
1Manski, C. F (1993) Identification of Endogenous Social Effects: The Reflection Problem1.000134100%
2Azevedo, E. M. and J. D. Leshno (2016) A Supply and Demand Framework for Two-Sided Matching Markets1.000124100%
3He, Y., S. Sinha, and X. Sun (2024) Identification and Estimation in Many-to-One Two-Sided Matching Without Transfers1.000106100%
4Brock, W. A. and S. N. Durlauf (2001) Interactions-Based Models, in1.00084100%
5Lee, A. J (1990) U-Statistics: Theory and Practice1.00064100%
6Bramoullé, Y., H. Djebbari, and B. Fortin (2009) Identification of Peer Effects Through Social Networks1.00063100%
7Brock, W. A. and S. N. Durlauf (2005) Multinomial Choice with Social Interactions, in1.00053100%
8Sacerdote, B (2011) Peer Effects in Education: How Might They Work, How Big Are They and How Much Do We Know Thus Far? in0.92843100%
9Ioannides, Y. M. and J. E. Zabel (2008) Interactions, Neighborhood Selection and Housing Demand0.92843100%
10Johnsson, I. and H. R. Moon (2021) Estimation of Peer Effects in Endogenous Social Networks: Control Function Approach0.92843100%

Showing the top 10 of 85 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Identification and Estimation of Semiparametric Multilayered Sample Selection Models0.40511