The School of Economics invites you to an Econometrics seminar presented by Arthur Lewbel (Boston College). 

Social Networks with Misclassified or Unobserved Links

Co-authors: 

Xi Qu (Shanghai Jiao Tong University) and Xun Tang (Rice University)

Abstract 

We identify and estimate social network models when network links are either misclassifed or unobserved in the data. First, we derive conditions under which some misclassification of links does not interfere with the consistency or asymptotic properties of standard instrumental variable estimators of social effects. Second, we construct a consistent estimator of social effects in a model where network links are not observed in the data at all. Our method does not require repeated observations of individual network members. We apply our estimator to data from Tennessee’s Student/Teacher Achievement Ratio (STAR) Project. Without observing the latent network in each classroom, we identify and estimate peer and contextual effects on students’ performance in mathematics. We find that peer effects tend to be larger in bigger classes, and that increasing peer effects would significantly improve students’ average test scores.

Download the full paper: Social Networks with Misclassified or Unobserved Links