arXiv Open Access 2024

Identification of a Rank-dependent Peer Effect Model

Eyo I. Herstad Myungkou Shin

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Abstrak

We develop a model that captures peer effect heterogeneity by modeling the endogenous spillover to be linear in ordered peer outcomes. Unlike the canonical linear-in-means model, our approach accounts for the distribution of peer outcomes as well as the size of peer groups. Under a minimal condition, our model admits a unique equilibrium and is therefore tractable and identified. Simulations show our estimator has good finite sample performance. Finally, we apply our model to educational data from Norway, finding that higher-performing friends disproportionately drive GPA spillovers. Our framework provides new insights into the structure of peer effects beyond aggregate measures.

Topik & Kata Kunci

econ.EM

Penulis (2)

Eyo I. Herstad

Myungkou Shin

Format Sitasi

APA MLA BibTeX

Herstad, E.I., Shin, M. (2024). Identification of a Rank-dependent Peer Effect Model. https://arxiv.org/abs/2410.14317

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Informasi Jurnal

Tahun Terbit: 2024
Bahasa: en
Sumber Database: arXiv
Akses: Open Access ✓