Specification and Estimation of Social Interaction Models with Network Structures

32 Pages Posted: 10 May 2010

See all articles by Lung-Fei Lee

Lung-Fei Lee

Ohio State University (OSU) - Economics

Xiaodong Liu

University of Colorado at Boulder - Department of Economics

Xu Lin

Wayne State University

Date Written: 2009-12

Abstract

This paper considers the specification and estimation of social interaction models with network structures and the presence of endogenous, contextual and correlated effects. With macro group settings, group-specific fixed effects are also incorporated in the model. The network structure provides information on the identification of the various interaction effects. We propose a quasi-maximum likelihood approach for the estimation of the model. We derive the asymptotic distribution of the proposed estimator, and provide Monte Carlo evidence on its small sample performance.

Suggested Citation

Lee, Lung-Fei and Liu, Xiaodong and Lin, Xu, Specification and Estimation of Social Interaction Models with Network Structures (2009-12). Econometrics Journal, Vol. 13, Issue 2, pp. 145-176, July 2010. Available at SSRN: https://ssrn.com/abstract=1602158 or http://dx.doi.org/10.1111/j.1368-423X.2010.00310.x

Lung-Fei Lee

Ohio State University (OSU) - Economics ( email )

410 Arps Hall
1945 N. High St.
Columbus, OH 43210-1172
United States

Xiaodong Liu

University of Colorado at Boulder - Department of Economics ( email )

Campus Box 256
Boulder, CO 80309
United States

HOME PAGE: http://spot.colorado.edu/~xiaodong/

Xu Lin

Wayne State University ( email )

Detroit, MI 48202
United States

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