Measurement of Peer Effects

# Measurement of Peer Effects - Measurement of Peer E/ects...

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Unformatted text preview: Measurement of Peer E/ects Manski (1993), Mo¢ tt (2001), Wooldridge 11.5 Classic Example students motivated by classmates peer group formed by classroom g k- group of students in classroom k achieve i = & + ¡ E ( achieve j k ) + u i with i 2 g k achieve- performance on achievement test E ( achieve j k )- expected achieve in classroom k i students (30 in each of 3 classrooms) Finding of Peer E/ects? researchers often &nd ^ & > and statistically signi&cant and might argue "evidence of peer e/ects" Di¢ culties simultaneity (re¡ection problem) correlated unobservables endogenous group selection Re&ection Problem Proposed regression: achieve i = & + ¡ E ( achieve j k ) + u i E ( achieve i j k ) = & + ¡ E ( achieve j k ) E ( achieve j k ) same for all students in k ) E ( achieve i j k ) = E ( achieve j k ) ) E ( achieve i j k ) = & 1 & ¡ achieve i = & 1 & ¡ + u i & and ¡ are not separately identi¡ed Simultaneity & Exogenous E/ects Exogenous e/ect Students motivated by classmates¡parents parent i- achievement of parents of i 2 students in class achieve 1 = & + ¡achieve 2 + ¢parent 2 + £parent 1 + u 1 achieve 2 = & + ¡achieve 1 + ¢parent 1 + £parent 2 + u 2 no excluded exogenous variables order condition violated ) ( ¡; ¢; £ ) not identi¢ed Reduced-Form Identi&cation Reduced form achieve 1 = & 1 + & 2 parent 1 + & 3 parent 2 + v 1 achieve 2 = & 1 + & 2 parent 2 + & 3 parent 1 + v 2 If Cov & parent i ; v j ¡ = 0 , then OLS delivers consistent estimates of ( & 1 ; & 2 ; & 3 ) & 3 = ¡ + ¢£ 1 & ¢ 2 & 3 6 = 0 ) social e/ects Social E/ects Multipliers (Endogenous) Peer E/ects - have a social multiplier...
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## This note was uploaded on 12/26/2011 for the course ECON 245a taught by Professor Staff during the Fall '08 term at UCSB.

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Measurement of Peer Effects - Measurement of Peer E/ects...

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