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Identification and Estimation of Social Interaction-Based Models: A Changes-In-Changes Approach with an Application to Adolescent Substance Use

Authors: Yang, Muzhe; Yang, Muzhe;

Identification and Estimation of Social Interaction-Based Models: A Changes-In-Changes Approach with an Application to Adolescent Substance Use

Abstract

This paper outlines a method for detecting and assessing the strength of social interactions through a changes-in-changes design. The proposed approach is based on a linear-in-means model and aims to resolve the "reflection problem", unobserved heterogeneities and endogenous group formation that plague identification of social interactions. Using longitudinal data from Add Health with rarely collected information on peer group's composition, we explore an exogenous variation in peer's drug use induced by a "mover friend" that occurs between Add Health's survey periods. This quasi-experiment shares a similar nature of a policy intervention of removing drug-user friends from a peer group. Such treatment-control group differences together with changes over time form the basis of our changes-in-changes design. Our study confirms a strong endogenous effect, which in turn motivates a "social multiplier", both of which are large enough to be relevant and are well worth attention to policy makers, researchers, health-care providers and educators for better understanding of how to protect young people and secure our future.

Keywords

linear-in-means, difference-in-differences, Demand and Price Analysis, changes-in-changes, social interactions, linear-in-expectations

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
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