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Ulric B. and Evelyn L. Bray Social Sciences Seminar

Tuesday, March 5, 2019
4:00pm to 5:00pm
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Baxter B125
Estimation of Peer Effects in Endogenous Social Networks: Control Function Approach
Hyungsik Roger Moon, Professor in Economics, USC,

Abstract: We propose a method of estimating the linear-in-means model of peer effects in which the peer group, defined by a social network, is endogenous in the outcome equation for peer effects. Endogeneity is due to unobservable individual characteristics that influence both link formation in the network and the outcome of interest. We propose two estimators of the peer effect equation that control for the endogeneity of the social connections using a control function approach. We leave the functional form of the control function unspecified and treat it as unknown. To estimate the model, we use a sieve semiparametric approach, and we establish asymptotics of the semiparametric estimator.

Click here to view the full paper, written with Ida Johnsson.

For more information, please contact Sabrina Hameister by phone at 626-395-4228 or by email at sabrina@hss.caltech.edu.