Econometrica

Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Mar, 2024, Volume 92, Issue 2

Randomization tests for peer effects in group formation experiments

https://doi.org/10.3982/ECTA20134
p. 567-590

Guillaume Basse, Peng Ding, Avi Feller, Panos Toulis

Measuring the effect of peers on individuals' outcomes is a challenging problem, in part because individuals often select peers who are similar in both observable and unobservable ways. Group formation experiments avoid this problem by randomly assigning individuals to groups and observing their responses; for example, do first‐year students have better grades when they are randomly assigned roommates who have stronger academic backgrounds? In this paper, we propose randomization‐based permutation tests for group formation experiments, extending classical Fisher Randomization Tests to this setting. The proposed tests are justified by the randomization itself, require relatively few assumptions, and are exact in finite samples. This approach can also complement existing strategies, such as linear‐in‐means models, by using a regression coefficient as the test statistic. We apply the proposed tests to two recent group formation experiments.


Full Content

Supplemental Material

Supplement to "Randomization tests for peer effects in group formation experiments"

Guillaume Basse, Peng Ding, Avi Feller, and Panos Toulis

This supplement contains material not found within the manuscript.

Supplement to "Randomization tests for peer effects in group formation experiments"

Guillaume Basse, Peng Ding, Avi Feller, and Panos Toulis

The replication package for this paper is available at https://doi.org/10.5281/zenodo.8336416. The authors were granted an exemption to publish their data because either access to the data is restricted or the authors do not have the right to republish them. Therefore, the replication package only includes the codes but not the data. However, the authors provided the Journal with (or assisted the Journal to obtain) temporary access to the data. The Journal checked the restricted data and the provided codes for their ability to reproduce the results in the paper and approved online appendices.