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STICERD Econometrics Seminar Series

Estimating Social Network Models with Link Misclassification

Xun Tang (Rice University), joint with Arthur Lewbel and Xi Qu

Wednesday 06 March 2024 14:00 - 15:30

Many of our seminars and public events this year will continue as in person or as hybrid (online and in person) events. Please check our website listings and Twitter feed @STICERD_LSE for updates.

Unless otherwise specified, in-person seminars are open to the public.

Those unable to join the seminars in-person are welcome to participate via zoom if the event is hybrid.

About this event

We propose an adjusted 2SLS estimator for social network models when the network links reported in samples are subject to two-sided misclassification errors (due, e.g., to recall errors by survey respondents, or lapses in data input). Misclassified links make all covariates endogenous, and add a new source of correlation between the structural errors and peer outcomes (in addition to simultaneity), thus invalidating conventional estimators used in the literature. We resolve these issues by adjusting endogenous peer outcomes with estimates of the misclassification rates and constructing new instruments that exploit properties of the noisy network measures. Simulation results confirm our adjusted 2SLS estimator corrects the bias from a naive, unadjusted 2SLS estimator which ignores misclassification and uses conventional instruments. We apply our method to study peer effects in household decisions to participate in a microfinance program in Indian villages.

STICERD Econometrics seminars are held on Thursdays in term time at 14.00-15.30, in SAL 3.05, unless specified otherwise.

Seminar organisers: Professor Tai Otsu and Dr. Vassilis Hajivassiliou.

For further information please contact Sadia Ali:

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