The Use of Instrumental Variables in Peer Effects Models

Stephanie von Hinke; George Leckie; Cheti Nicoletti

doi:10.1111/obes.12299

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 journal › Article (Academic Journal) › peer-review

22 Citations (Scopus)

174 Downloads (Pure)

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 language	English
Number of pages	13
Journal	Oxford Bulletin of Economics and Statistics
Early online date	4 Feb 2019
DOIs	https://doi.org/10.1111/obes.12299
Publication status	E-pub ahead of print - 4 Feb 2019

Research Groups and Themes

ECON Applied Economics
SoE Centre for Multilevel Modelling
ECON CEPS Data

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10.1111/obes.12299

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The Use of Instrumental Variables in Peer Effects Models

Abstract

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The Use of Instrumental Variables in Peer Effects Models

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