The Use of Instrumental Variables in Peer Effects Models

Stephanie von Hinke*, George Leckie, Cheti Nicoletti

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)

Abstract

Instrumental variables are often used to identify peer effects. This paper shows that instrumenting the ‘peer average outcome’ with ‘peer average characteristics’ requires the researcher to include the instrument at the individual level as an explanatory variable. We highlight the bias that occurs when failing to do this.
Original languageEnglish
Number of pages13
JournalOxford Bulletin of Economics and Statistics
Early online date4 Feb 2019
DOIs
Publication statusE-pub ahead of print - 4 Feb 2019

Structured keywords

  • ECON Applied Economics
  • ECON CEPS
  • SoE Centre for Multilevel Modelling

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