Peer Effects: Social Multiplier or Social Norms?

53 Pages Posted: 26 Feb 2013

See all articles by Xiaodong Liu

Xiaodong Liu

University of Colorado at Boulder - Department of Economics

Eleonora Patacchini

Einaudi Institute for Economics and Finance (EIEF) ; IZA Institute of Labor Economics

Yves Zenou

Monash University - Department of Economics; Stockholm University; Research Institute of Industrial Economics (IUI); IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Date Written: February 2013

Abstract

We develop an unified model embedding different behavioral mechanisms of social interactions and design a statistical model selection test to discriminate between them in empirical applications. This framework is applied to study peer effects in education and delinquent behavior for adolescents in the United States. We find that there are strong social multiplier effects in crime while, for education, social norms matter the most. This suggests that, for crime, individual-based policies are more appropriate while, for education, group-based policies are more effective.

Keywords: group-based policy., individual-based policy, Social networks, spatial autoregressive model

JEL Classification: A14, D85, Z13

Suggested Citation

Liu, Xiaodong and Patacchini, Eleonora and Zenou, Yves, Peer Effects: Social Multiplier or Social Norms? (February 2013). CEPR Discussion Paper No. DP9366. Available at SSRN: https://ssrn.com/abstract=2224291

Xiaodong Liu (Contact Author)

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

Campus Box 256
Boulder, CO 80309
United States

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

Eleonora Patacchini

Einaudi Institute for Economics and Finance (EIEF) ( email )

Via Due Macelli, 73
Rome, 00187
Italy

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Yves Zenou

Monash University - Department of Economics ( email )

Australia

Stockholm University ( email )

Universitetsvägen 10
Stockholm, Stockholm SE-106 91
Sweden

Research Institute of Industrial Economics (IUI) ( email )

P.O. Box 5501
S-114 85 Stockholm
Sweden

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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