nep-net New Economics Papers
on Network Economics
Issue of 2017‒05‒28
five papers chosen by
Pedro CL Souza
Pontifícia Universidade Católica do Rio de Janeiro

  1. Social Interactions, Mechanisms, and Equilibrium: Evidence From a Model of Study Time and Academic Achievement By Tim Conley; Nirav Mehta; Todd Stinebrickner; Ralph Stinebrickner
  2. Specification and Estimation of Network Formation and Network Interaction Models with the Exponential Probability Distribution By Hsieh, Chih-Sheng; Lee, Lung fei
  3. Sun, Regulation and Local Social Networks By Antoine Bonleu
  4. Friendship network composition and subjective wellbeing By Awaworyi Churchill, Sefa; Smyth, Russell
  5. How Do Peers Impact Learning? An Experimental Investigation of Peer-to-Peer Teaching and Ability Tracking By Erik O. Kimbrough; Andrew D. McGee; Hitoshi Shigeoka

  1. By: Tim Conley (University of Western Ontario); Nirav Mehta (University of Western Ontario); Todd Stinebrickner (Western University); Ralph Stinebrickner (University of Western Ontario)
    Abstract: We develop and estimate a model of study time choices of students on a social network. The model is designed to exploit unique data collected in the Berea Panel Study. Study time data allow us to quantify an intuitive mechanism for academic social interactions: own study time may depend on friend study time. Social network data allow study time choices and resulting academic achievement to be embedded in an estimable equilibrium framework. New data on study propensities allow us to directly address potential sorting into friendships based on typically unobserved determinants of study time. We develop a specifi cation test that exploits the equilibrium nature of social interactions and use it to show that our study propensity measures substantially address endogeneity concerns. We find friend study time strongly affects own study time, and, therefore, student achievement. We examine how network structure interacts with student characteristics to affect academic achievement. Sorting on friend characteristics appears important in explaining variation across students in study time and achievement, and determines the aggregate achievement level.
    Keywords: social networks, peer effects, homophily, time-use
    JEL: H00 I20 J00
    Date: 2017–05
  2. By: Hsieh, Chih-Sheng; Lee, Lung fei
    Abstract: In this paper, we model network formation and network interactions under a unified framework. The key feature of our model is to allow individuals to respond to incentives stemming from interaction benefits on certain activities when they choose friends (network links), while capturing homophily in terms of unobserved characteristic variables in network formation and activities. There are two advantages of this modeling approach: first, one can evaluate whether incentives from certain interactions are important factors for friendship formation or not. Second, in addition to homophily effects in terms of unobserved characteristics, inclusion of incentive effects in the network formulation also corrects possible friendship selection bias on activity outcomes under network interactions. A theoretical foundation of this unified model is based on a complete information cooperative game. A tractable Bayesian MCMC approach is proposed for the estimation of the model. We apply the model to empirically study American high school students' friendship networks with the Add Health data. We consider two activity variables, GPA and smoking frequency, and find a significant incentive effect from GPA, but not from smoking, on friendship formation. These results suggest that the benefit of interactions in academic learning is an important factor for friendship formation, while the interaction benefit in smoking is not, even though homophily in smoking behavior is important for a smoker to link to other smokers. On the other hand, from the perspective of network interactions, both GPA and smoking frequency are subject to significant positive interaction (peer) effects.
    Keywords: Social Networks, social interaction, selectivity, spatial autoregression, Bayesian estimation
    JEL: C21 C25 I21 J13
    Date: 2017–04–08
  3. By: Antoine Bonleu (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - CNRS - Centre National de la Recherche Scientifique - ECM - Ecole Centrale de Marseille - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales)
    Abstract: The aim of this paper is to explain over-regulation and local social capital as barriers to immigration. The interest of social networks is that conflict resolution is independent of the law. Hence, if local individuals develop local social capital and regulation, foreigners without social networks are disadvantaged and can less easily migrate. We develop a two-country search-theoretic model where we endogenize the choice of procedural formalism (PF) and the network size. This model features two different equilibria: a Mediterranean equilibrium with PF and dense local social network and a Scandinavian and Anglo-Saxon equilibrium without PF and local social networks.
    Keywords: housing market regulation,mobility,local social capital,climate amenities,social networks
    Date: 2017–04
  4. By: Awaworyi Churchill, Sefa; Smyth, Russell
    Abstract: Using data from the UK Community Life Survey, we present the first study to examine the relationship between heterogeneity in one’s friendship network and subjective wellbeing. We measure network heterogeneity by the extent to which one’s friends are similar to oneself with regard to ethnicity and religion. We find that people who have friendship networks with characteristics dissimilar to themselves have lower levels of subjective wellbeing. Specifically, our two-stage least squares (2SLS) estimates, using measures of ethnic and religious diversity based on the Herfindahl-type fractionalization index that are flipped between adjoining rural/urban areas as instruments, suggest that a standard deviation increase in the proportion of one’s friends from different ethnic (religious) groups is associated with a decrease of 0.276 (0.451) standard deviations in subjective wellbeing.
    Keywords: friendship,heterogeneity,social capital,networks,wellbeing
    JEL: Z12 J15 I31
    Date: 2017
  5. By: Erik O. Kimbrough (Simon Fraser University); Andrew D. McGee (University of Alberta); Hitoshi Shigeoka (Simon Fraser University)
    Abstract: Classroom peers are believed to influence learning by teaching each other, and the efficacy of this teaching likely depends on classroom composition in terms of peers’ ability. Unfortunately, little is known about peer-to-peer teaching because it is never observed in field studies. Furthermore, identifying how peer-to-peer teaching is affected by ability tracking—grouping students of similar ability—is complicated by the fact that tracking is typically accompanied by changes in curriculum and the instructional behavior of teachers. To fill this gap, we conduct a laboratory experiment in which subjects learn to solve logic problems and examine both the importance of peer-to-peer teaching and the interaction between peer-to-peer teaching and ability tracking. While peer-to-peer teaching improves learning among low-ability subjects, the positive effects are substantially offset by tracking. Tracking reduces the frequency of peer-to-peer teaching, suggesting that low-ability subjects suffer from the absence of high-ability peers to teach them.
    Keywords: Peer-to-peer Teaching, Ability Tracking, Peer Effects, Group Composition, Education and Inequality, Laboratory Experiment
    JEL: H32 H26 K42
    Date: 2017–05

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