Econometrica: May 2008, Volume 76, Issue 3

Identifying Social Interactions Through Conditional Variance Restrictions

https://doi.org/10.1111/j.1468-0262.2008.00850.x
p. 643-660

Bryan S. Graham

This paper proposes a new method for identifying social interactions using conditional variance restrictions. The method provides a consistent estimate of the social multiplier when social interactions take the “linear‐in‐means” form (Manski (1993)). When social interactions are not of the linear‐in‐means form, the estimator, under certain conditions, continues to form the basis of a consistent test of the no social interactions null with correct large sample size. The methods are illustrated using data from the Tennessee class size reduction experiment Project STAR. The application suggests that differences in peer group quality were an important source of individual‐level variation in the academic achievement of Project STAR kindergarten students.

Log In To View Full Content

Supplemental Material

Supplement to "Identifying Social Interactions through Conditional Variance Restrictions"

This document outlines supplementary results and includes all notation, unless explicitly stated otherwise.

Read More View PDF


Supplement to "Identifying Social Interactions through Conditional Variance Restrictions"

This zip file contains two MATLAB data files, a Stata data file, three Stata do files, and two MATLAB m files.

Read More View ZIP


Back