arXiv 17 Aug 2026 · Econometrics
arXiv:2608.16468 · PDF · Extracted main text
Empirical studies of peer effects often exploit conditional random assignment to peer groups within urns. We develop a GMM framework for estimation and inference in this setting. The framework separately identifies endogenous and contextual peer effects and nests tests of random peer-group assignment as a special case. It permits unknown heteroskedasticity and corrects finite-urn bias in variance estimation. Its asymptotic theory allows the number of peer groups to grow through more urns, more groups within urns, or both. We establish the asymptotic validity of the procedures and evaluate their finite-sample performance through Monte Carlo simulations. We apply the method to study peer effects on personality among university students. For traits with positive reduced-form peer effects, the estimates indicate that positive contextual effects are partly offset by negative endogenous effects.
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| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Lin, Xu and Lee, Lung-fei GMM Estimation of Spatial Autoregressive Models with Unknown Heteroskedasticity | 0.961 | 9 | 3 | 89% |
| 2 | Kelejian, Harry H. and Prucha, Ingmar R Specification and Estimation of Spatial Autoregressive Models with Autoregressive and Heteroskedastic Disturbances | 0.935 | 11 | 4 | 82% |
| 3 | Shan, Xiaoyue and Zölitz, Ulf Peers Affect Personality Development | 0.874 | 10 | 2 | 100% |
| 4 | Kuersteiner, Guido M. and Prucha, Ingmar R. and Zeng, Ying Efficient Peer Effects Estimators with Group Effects self | 0.843 | 4 | 3 | 75% |
| 5 | Lee, Lung-Fei Identification and Estimation of Econometric Models with Group Interactions, Contextual Factors and Fixed Effects | 0.737 | 3 | 2 | 100% |
| 6 | Caeyers, Bet and Fafchamps, Marcel Exclusion Bias and the Estimation of Peer Effects | 0.709 | 14 | 3 | 36% |
| 7 | Jochmans, Koen Testing Random Assignment to Peer Groups | 0.684 | 25 | 4 | 32% |
| 8 | Sacerdote, Bruce Peer Effects with Random Assignment: Results for Dartmouth Roommates | 0.669 | 10 | 3 | 30% |
| 9 | Feld, Jan and Zölitz, Ulf Understanding Peer Effects: On the Nature, Estimation, and Channels of Peer Effects | 0.644 | 3 | 2 | 67% |
| 10 | Graham, Bryan S Identifying Social Interactions Through Conditional Variance Restrictions | 0.644 | 2 | 2 | 100% |
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