DP9366 Peer Effects: Social Multiplier or Social Norms?

Author(s): Xiaodong Liu, Eleonora Patacchini, Yves Zenou
Publication Date: February 2013
Keyword(s): group-based policy., individual-based policy, Social networks, spatial autoregressive model
JEL(s): A14, D85, Z13
Programme Areas: Labour Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=9366

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.