Jochmans, Koen (2021) Testing Random Assignment To Peer Groups. TSE Working Paper, n. 21-1270, Toulouse

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Abstract

Identification of peer effects is complicated by the fact that the individuals under study may self-select their peers. Random assignment to peer groups has proven useful to sidestep such a concern. In the absence of a formal randomization mechanism it needs to be argued that assignment is `as good as' random. This paper introduces a simple yet powerful test to do so. We provide theoretical results for this test. As a by-product we equally obtain such results for an approach popularized by Guryan, Kroft and Notowidigdo (2009). These results help to explain why this approach suffers from low power, as has been observed elsewhere. Our approach can equally be used to test for the presence of peer effects in the linear-in-means model without modification.

Item Type: Monograph (Working Paper)
Language: English
Date: 10 November 2021
Place of Publication: Toulouse
Uncontrolled Keywords: asymptotic power, bias, fixed effects, peer effects, random assignment, test
JEL Classification: C12 - Hypothesis Testing
C21 - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 06 Dec 2021 13:37
Last Modified: 06 Dec 2021 13:37
OAI Identifier: oai:tse-fr.eu:126193
URI: https://publications.ut-capitole.fr/id/eprint/44013
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