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Testing Random Assignment To Peer Groups

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  • Jochmans, Koen

Abstract

Identification of peer effects is complicated by the fact that the individuals under study may self-select their peers. Random assignment to peer groups has proven useful to sidestep such a concern. In the absence of a formal randomization mechanism it needs to be argued that assignment is `as good as' random. This paper introduces a simple yet powerful test to do so. We provide theoretical results for this test. As a by-product we equally obtain such results for an approach popularized by Guryan, Kroft and Notowidigdo (2009). These results help to explain why this approach suffers from low power, as has been observed elsewhere. Our approach can equally be used to test for the presence of peer effects in the linear-in-means model without modification.

Suggested Citation

  • Jochmans, Koen, 2021. "Testing Random Assignment To Peer Groups," TSE Working Papers 21-1270, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:126193
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    References listed on IDEAS

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    Cited by:

    1. Carneiro, Pedro & Cruz Aguayo, Yyannu & Salvati, Francesca & Schady, Norbert, 2023. "The Effect of Classroom Rank on Learning throughout Elementary School: Experimental Evidence from Ecuador," IZA Discussion Papers 16384, Institute of Labor Economics (IZA).
    2. Jonas Radbruch & Amelie Schiprowski, 2020. "Interview Sequences and the Formation of Subjective Assessments," ECONtribute Discussion Papers Series 045, University of Bonn and University of Cologne, Germany.
    3. Deng, Weiguang & Jiang, Shengjun & Li, Xue & Ye, Maoliang, 2024. "Peer effects in donations: Evidence from random assignment of college roommates," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 631-644.

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    More about this item

    Keywords

    asymptotic power; bias; fixed effects; peer effects; random assignment; test;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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