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Peer correlations in income: Evidence from a Guanxi network in rural China

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Listed:
  • Fang, Hang
  • Chen, Qianheng
  • Delgado, Michael S.
  • He, Qinying

Abstract

We investigate peer correlations in income using a novel panel of data from a village in China. We construct a complete and heterogeneous social connections (guanxi) network that includes all households, and use spatial-network econometric models to estimate peer correlations. The results provide unique empirical evidence for the existence of a peer correlation in income, even after netting out influences of family characteristics, contextual effects, and various unobservable factors. We identify peer effects in land and labor allocations as the drivers of peer correlations in income.

Suggested Citation

  • Fang, Hang & Chen, Qianheng & Delgado, Michael S. & He, Qinying, 2023. "Peer correlations in income: Evidence from a Guanxi network in rural China," Economics Letters, Elsevier, vol. 222(C).
    • Handle: RePEc:eee:ecolet:v:222:y:2023:i:c:s0165176522004335
    DOI: 10.1016/j.econlet.2022.110959
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    References listed on IDEAS

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    1. Thomas Cornelissen & Christian Dustmann & Uta Schönberg, 2017. "Peer Effects in the Workplace," American Economic Review, American Economic Association, vol. 107(2), pages 425-456, February.
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    4. Songsermsawas, Tisorn & Baylis, Kathy & Chhatre, Ashwini & Michelson, Hope, 2016. "Can Peers Improve Agricultural Revenue?," World Development, Elsevier, vol. 83(C), pages 163-178.
    5. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(3), pages 531-542.
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    Cited by:

    1. Hang Fang & Ting Yu & Michael S Delgado & Qianheng Qian, 2024. "Infectious happiness in heterogeneous social networks: evidence from rural China," Economics Bulletin, AccessEcon, vol. 44(3), pages 1188-1195.
    2. Mingyong Hong & Jiao Long & Wenjun Zhuo, 2023. "Clan Networks, Spatial Selection, and Farmland Transfer Contracts: Evidence from China," Land, MDPI, vol. 12(8), pages 1-17, July.

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    More about this item

    Keywords

    Peer correlations; Income; Guanxi network; China;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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