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Identification of peer effects through social networks using variance restrictions

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  • Christiern D. Rose

Abstract

This paper presents a novel method to identify peer effects through exploiting fluctuations in the variances and covariances of outcomes over a social network. Endogenous and contextual peer effects can be disentangled by contrasting the covariances of the outcomes of peers with the covariances of the outcomes of peers of peers. Correlated effects are incorporated by allowing for unrestricted network level heterogeneity. The method is applied to the Project STAR data to study peer effects in academic attainment of first‐year kindergarten students. Evidence is found of positive peer effects, which are statistically significant and consistent with the existing literature.

Suggested Citation

  • Christiern D. Rose, 2017. "Identification of peer effects through social networks using variance restrictions," Econometrics Journal, Royal Economic Society, vol. 20(3), pages 47-60, October.
    • Handle: RePEc:wly:emjrnl:v:20:y:2017:i:3:p:s47-s60
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    File URL: http://hdl.handle.net/10.1111/ectj.12101
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    Cited by:

    1. Eliana Barrenho & Eric Gautier & Marisa Miraldo & Carol Propper & Christiern Rose, 2020. "Innovation Diffusion and Physician Networks: Keyhole Surgery for Cancer in the English NHS," Discussion Papers Series 638, School of Economics, University of Queensland, Australia.
    2. Boucher, Vincent & Dedewanou, F. Antoine & Dufays, Arnaud, 2022. "Peer-induced beliefs regarding college participation," Economics of Education Review, Elsevier, vol. 90(C).
    3. Koen Jochmans, 2023. "Testing random assignment to peer groups," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 38(3), pages 321-333, April.
    4. Marisa Miraldo & Carol Propper & Christiern Rose, 2020. "Identification of Peer Effects using Panel Data," Discussion Papers Series 639, School of Economics, University of Queensland, Australia.
    5. Celia Landmann Szwarcwald & Paulo Roberto Borges de Souza Junior & Thaiza Dutra Gomes de Carvalho & Rita Suely Bacuri de Queiroz & Euclides Ayres de Castilho & Maria do Carmo Leal, 2024. "Using Respondent-Driven Sampling (RDS) to Identify the Healthcare Needs among Women of Reproductive Age Who Migrated from Venezuela to Brazil, 2018–2021," IJERPH, MDPI, vol. 21(6), pages 1-16, June.
    6. Christiern Rose & Lizi Yu, 2021. "Identification of Peer Effects with Miss-specified Peer Groups: Missing Data and Group Uncertainty," Papers 2104.10365, arXiv.org, revised May 2022.
    7. Aristide Houndetoungan & Cristelle Kouame & Michael Vlassopoulos, 2024. "Identifying Peer Effects in Networks with Unobserved Effort and Isolated Students," Papers 2405.06850, arXiv.org.
    8. Houndetoungan, Aristide & Kouame, Cristelle & Vlassopoulos, Michael, 2024. "Identifying Peer Effects in Networks with Unobserved Effort and Isolated Students," IZA Discussion Papers 16998, Institute of Labor Economics (IZA).
    9. Alice Battiston & Sophie Hedges & Thomas Lazarowicz & Stefan Speckesser, 2020. "Peer Effects and Social Influence in Post-16 Educational Choice," CVER Research Papers 025, Centre for Vocational Education Research.
    10. Baris Ata & Alexandre Belloni & Ozan Candogan, 2018. "Latent Agents in Networks: Estimation and Targeting," Papers 1808.04878, arXiv.org, revised Jan 2022.
    11. Guido Kuersteiner & Ingmar Prucha & Ying Zeng, 2024. "Differential Test Performance and Peer Effects," Papers 2406.05283, arXiv.org.

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