IDEAS home Printed from https://ideas.repec.org/p/zbw/vfsc15/113168.html
   My bibliography  Save this paper

Endogenous Social Interactions: Which Peers Matter?

Author

Listed:
  • Tatsi, Eirini

Abstract

This paper compares endogenous social interactions models to determine which one fits the classroom reality best. The analysis uses data from German 9th-graders and considers the effect of the best and worst peers scores, the peers sum and peers average scores on own achievement. Although each model seems plausible when estimated separately, comparison and a selection test point to the classmates average model, meaning that group-based policies are effective. The worst peers model comes second, followed by the best peers and the sum of peers models. Examination of different-ability students responses to increases of average peer achievement reveals either competition for the first place or last-place aversion. Conditional on own course preferences, own and peer characteristics, spillovers transmit only through cognitive ability. Therefore, regrouping on the basis of characteristics such as immigration background is obsolete. Policies should aim at low achievers in small enough classrooms because only then single-student influences can change the social norm. By improving the average through the worst, the best become even brighter.

Suggested Citation

  • Tatsi, Eirini, 2015. "Endogenous Social Interactions: Which Peers Matter?," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113168, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc15:113168
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/113168/1/VfS_2015_pid_132.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sacerdote, Bruce, 2011. "Peer Effects in Education: How Might They Work, How Big Are They and How Much Do We Know Thus Far?," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 3, chapter 4, pages 249-277, Elsevier.
    2. Vincent Boucher & Yann Bramoullé & Habiba Djebbari & Bernard Fortin, 2014. "Do Peers Affect Student Achievement? Evidence From Canada Using Group Size Variation," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(1), pages 91-109, January.
    3. Ji Tao & Lung‐fei Lee, 2014. "A social interaction model with an extreme order statistic," Econometrics Journal, Royal Economic Society, vol. 17(3), pages 197-240, October.
    4. Tae-Hwan Kim & Christophe Muller, 2004. "Two-stage quantile regression when the first stage is based on quantile regression," Econometrics Journal, Royal Economic Society, vol. 7(1), pages 218-231, June.
    5. Ethan Cohen‐Cole & Xiaodong Liu & Yves Zenou, 2018. "Multivariate choices and identification of social interactions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 33(2), pages 165-178, March.
    6. Victor Lavy & M. Daniele Paserman & Analia Schlosser, 2012. "Inside the Black Box of Ability Peer Effects: Evidence from Variation in the Proportion of Low Achievers in the Classroom," Economic Journal, Royal Economic Society, vol. 122(559), pages 208-237, March.
    7. Liu, Xiaodong & Patacchini, Eleonora & Zenou, Yves, 2014. "Endogenous peer effects: local aggregate or local average?," Journal of Economic Behavior & Organization, Elsevier, vol. 103(C), pages 39-59.
    8. 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.
    9. Kelejian, Harry H & Prucha, Ingmar R, 1998. "A Generalized Spatial Two-Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 99-121, July.
    10. Chernozhukov, Victor & Hansen, Christian, 2006. "Instrumental quantile regression inference for structural and treatment effect models," Journal of Econometrics, Elsevier, vol. 132(2), pages 491-525, June.
    11. Lung-fei Lee, 2003. "Best Spatial Two-Stage Least Squares Estimators for a Spatial Autoregressive Model with Autoregressive Disturbances," Econometric Reviews, Taylor & Francis Journals, vol. 22(4), pages 307-335.
    12. P. Bentler & Edward Freeman, 1983. "Tests for stability in linear structural equation systems," Psychometrika, Springer;The Psychometric Society, vol. 48(1), pages 143-145, March.
    13. Xiaodong Liu, 2014. "Identification and Efficient Estimation of Simultaneous Equations Network Models," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 32(4), pages 516-536, October.
    14. Scott E. Carrell & Bruce I. Sacerdote & James E. West, 2013. "From Natural Variation to Optimal Policy? The Importance of Endogenous Peer Group Formation," Econometrica, Econometric Society, vol. 81(3), pages 855-882, May.
    15. Angrist, Joshua D., 2014. "The perils of peer effects," Labour Economics, Elsevier, vol. 30(C), pages 98-108.
    16. Jane Cooley Fruehwirth, 2013. "Identifying peer achievement spillovers: Implications for desegregation and the achievement gap," Quantitative Economics, Econometric Society, vol. 4(1), pages 85-124, March.
    17. Victor Lavy & Olmo Silva & Felix Weinhardt, 2012. "The Good, the Bad, and the Average: Evidence on Ability Peer Effects in Schools," Journal of Labor Economics, University of Chicago Press, vol. 30(2), pages 367-414.
    18. Harry Kelejian, 2008. "A spatial J-test for model specification against a single or a set of non-nested alternatives," Letters in Spatial and Resource Sciences, Springer, vol. 1(1), pages 3-11, April.
    19. Lung-fei Lee & Xiaodong Liu & Xu Lin, 2010. "Specification and estimation of social interaction models with network structures," Econometrics Journal, Royal Economic Society, vol. 13(2), pages 145-176, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Díaz, Carlos & Patacchini, Eleonora & Verdier, Thierry & Zenou, Yves, 2021. "Leaders in juvenile crime," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 638-667.
    2. Youjin Hahn & Asadul Islam & Eleonora Patacchini & Yves Zenou, 2015. "Teams, Organization and Education Outcomes: Evidence from a field experiment in Bangladesh," Monash Economics Working Papers 35-15, Monash University, Department of Economics.
    3. Benjamin Elsner & Ingo E. Isphording, 2017. "A Big Fish in a Small Pond: Ability Rank and Human Capital Investment," Journal of Labor Economics, University of Chicago Press, vol. 35(3), pages 787-828.
    4. Hahn, Youjin & Islam, Asadul & Patacchini, Eleonora & Zenou, Yves, 2015. "Network Structure and Education Outcomes: Evidence from a Field Experiment in Bangladesh," IZA Discussion Papers 8872, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yann Bramoullé & Habiba Djebbari & Bernard Fortin, 2020. "Peer Effects in Networks: A Survey," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 603-629, August.
    2. Chih‐Sheng Hsieh & Hans van Kippersluis, 2018. "Smoking initiation: Peers and personality," Quantitative Economics, Econometric Society, vol. 9(2), pages 825-863, July.
    3. Kuersteiner, Guido M. & Prucha, Ingmar R. & Zeng, Ying, 2023. "Efficient peer effects estimators with group effects," Journal of Econometrics, Elsevier, vol. 235(2), pages 2155-2194.
    4. Griffith, Amanda L. & Main, Joyce B., 2019. "First impressions in the classroom: How do class characteristics affect student grades and majors?," Economics of Education Review, Elsevier, vol. 69(C), pages 125-137.
    5. Cheti Nicoletti & Birgitta Rabe, 2019. "Sibling spillover effects in school achievement," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 34(4), pages 482-501, June.
    6. Horrace, William & Jung, Hyunseok & Presler, Jonathan & Schwartz, Amy Ellen, 2021. "What Makes a Classmate a Peer? Examining which peers matter in NYC elementary schools," Working Papers 21-4, Sinquefield Center for Applied Economic Research, Saint Louis University, revised 17 Jan 2022.
    7. Wennberg, Karl & Norgren, Axel, 2021. "Models of Peer Effects in Education," Working Papers 21/3, Stockholm School of Economics, Center for Educational Leadership and Excellence.
    8. Topa, Giorgio & Zenou, Yves, 2015. "Neighborhood and Network Effects," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 561-624, Elsevier.
    9. Kwok, Hon Ho, 2019. "Identification and estimation of linear social interaction models," Journal of Econometrics, Elsevier, vol. 210(2), pages 434-458.
    10. Alexandra de Gendre & Nicolás Salamanca, 2020. "On the Mechanisms of Ability Peer Effects," Melbourne Institute Working Paper Series wp2020n19, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    11. Chung, Bobby W., 2020. "Peers’ parents and educational attainment: The exposure effect," Labour Economics, Elsevier, vol. 64(C).
    12. Adam S. Booij & Edwin Leuven & Hessel Oosterbeek, 2017. "Ability Peer Effects in University: Evidence from a Randomized Experiment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(2), pages 547-578.
    13. Silvia Mendolia & Alfredo R Paloyo & Ian Walker, 2018. "Heterogeneous effects of high school peers on educational outcomes," Oxford Economic Papers, Oxford University Press, vol. 70(3), pages 613-634.
    14. Chih‐Sheng Hsieh & Lung‐Fei Lee & Vincent Boucher, 2020. "Specification and estimation of network formation and network interaction models with the exponential probability distribution," Quantitative Economics, Econometric Society, vol. 11(4), pages 1349-1390, November.
    15. Zenou, Yves & Patacchini, Eleonora & Liu, Xiaodong, 2013. "Peer Effects: Social Multiplier or Social Norms?," CEPR Discussion Papers 9366, C.E.P.R. Discussion Papers.
    16. Meschi, Elena & Pavese, Caterina, 2023. "Ability composition in the class and the school performance of immigrant students," Labour Economics, Elsevier, vol. 85(C).
    17. Simone Balestra & Aurélien Sallin & Stefan C. Wolter, 2023. "High-Ability Influencers? The Heterogeneous Effects of Gifted Classmates," Journal of Human Resources, University of Wisconsin Press, vol. 58(2), pages 633-665.
    18. Richard Murphy & Felix Weinhardt, 2020. "Top of the Class: The Importance of Ordinal Rank," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(6), pages 2777-2826.
    19. Auestad, May Linn, 2018. "The effect of low-achieving peers," Labour Economics, Elsevier, vol. 55(C), pages 178-214.
    20. Santiago Pereda-Fernández, 2017. "Social Spillovers in the Classroom: Identification, Estimation and Policy Analysis," Economica, London School of Economics and Political Science, vol. 84(336), pages 712-747, October.

    More about this item

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • I20 - Health, Education, and Welfare - - Education - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:vfsc15:113168. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/vfsocea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.