We provide new results regarding the identification of peer effects. We consider an extended version of the linear-in-means model where each individual has his own specific reference group. Interactions are thus structured through a social network. We assume that correlated unobservables are either absent, or treated as fixed effects at the component level. In both cases, we provide easy-to-check necessary and sufficient conditions for identification. We show that endogenous and exogenous effects are generally identified under network interaction, although identification may fail for some particular structures. Monte Carlo simulations provide an analysis of the effects of some crucial characteristics of a network (i.e., density, intransitivity) on the estimates of social effects. Our approach generalizes a number of previous results due to Manski (1993), Moffitt (2001), and Lee (2007).

While interest in social determinants of individual behavior has led to a rich theoretical literature and many efforts to measure these influences, a mature “social econometrics ” has yet to emerge. This chapter provides a critical overview of the identification of social interactions. We consider linear and discrete choice models as well as social networks structures. We also consider experimental and quasi-experimental methods. In addition to describing the state of the identification literature, we indicate areas where additional research is especially needed and suggest some directions that appear to be especially promising.

We propose a feasible estimation procedure for a general class of models with social interactions which might display multiple equilibria. We evaluate the efficiency and computational feasibility of different approaches to solving the curse of dimensionality implied by the multiplicity. Furthermore, we implement the proposed estimation procedure using Add Health data to understand how group interactions affect teenagers’ smoking behavior. find strong social interaction effects both at the level of the friendship network and at the level of the school. We also find that multiplicity of equilibria is pervasive at the estimated parameter values. When comparing the actual level of smoking in each school with the lowest equilibrium level of smoking, we find that equilibrium selection accounts for about 15 percent additional smoking. Finally, when comparing the actual smoking with the equilibrium smoking that would occur if there were no interactions among

We provide the first empirical application of a new approach proposed by Lee (2007) to estimate peer effects in a linear-in-means model when individuals interact in groups. Assuming sufficient group size variation, this approach allows to control for correlated effects at the group level and to solve the simultaneity (reflection) problem. We clarify the intuition behind identification of peer effects in the model. We investigate peer effects in student achievement in French, Science, Mathematics and History in secondary schools in the Province of Québec (Canada). We estimate the model using conditional maximum likelihood and instrumental variables methods. We find some evidence of peer effects. The endogenous peer effect is large and significant in Math but imprecisely estimated in the other subjects. Some contextual peer effects are also significant. In particular, for most subjects, the average age of peers has a negative effect on own test score. Using calibrated Monte Carlo simulations, we find that high dispersion in group sizes helps with potential issues of weak identification.

and Urban Studies. The theme of the LSU-UNO Center is focused on Evacuation and Transportation Resiliency in an effort to address the multitude of issues that impact transportation processes under emergency conditions such as evacuation and other types of major events. This area of research also addresses the need to develop and maintain the ability of transportation systems to economically, efficiently, and safely respond to the changing demands that may be placed upon them. Research The Center focuses on addressing the multitude of issues that impact transportation processes under emergency conditions such as evacuation and other types of major events as well as the need to develop and maintain the ability of transportation systems to economically, efficiently, and safely respond to the changing conditions and demands that may be placed upon them. Work in this area include the development of modeling and analysis techniques; innovative design and control strategies; and travel demand estimation and planning methods that can be used to predict and improve travel under periods of immediate and overwhelming demand. In addition to detailed analysis of emergency transportation processes, The Center provides support for the broader study of transportation resiliency. This includes work on the key components of redundant transportation systems, analysis of congestion in relation to resiliency, impact of climate change and peak oil, provision of transportation options, and transportation finance. The scope of the work stretches over several different modes including auto, transit, maritime, and non-motorized. Education The educational goal of the Institute is to provide undergraduate-level education to students seeking careers in areas of transportation that are critical to Louisiana and to the field of transportation in general with local, national and international applications. Courses in Transportation Planning, Policy, and Land use are offered at UNO, under the Department of Planning and Urban Studies. In addition to the program offerings at UNO, LSU offers transportation engineering courses through its Department of Civil and Environmental Engineering. The Center also provides on-going research opportunities for graduate students as well as annual scholarships. Technology Transfer The LSU/UNO UTC conducts technology transfer activities in the following modes: 1) focused professional, specialized courses, workshops and seminars for private sector entities (business and nonprofits) and government interests, and the public on transport issues (based on the LSU-UNO activities); 2) Research symposia; transport issues (based on the LSU-UNO activities); 3) Presentations at professional organizations; 4) Publications. The Center sponsors the National Carless Evacuation Conference and has cosponsored other national conferences on active transportation. Disclaimer The contents of this report reflect the views of the authors, who are solely responsible for the facts and the accuracy of the material and information presented herein. This document is disseminated under the sponsorship of the U.S. Department of Transportation University Transportation Centers Program in the interest of information exchange. The U.S. Government assumes no liability for the contents or use thereof. The contents do not necessarily reflect the official views of the U.S. Government. This report does not constitute a standard, specification, or regulation. 16. Abstract: A spate of recent hurricanes and other natural disasters have drawn a lot of attention to the evacuation decision of individuals. Here we focus on evacuation models that incorporate two economic phenomena that seem to be increasingly important in explaining human behavior: hyperbolic discounting and peer effects. The first part of this research explores the behavior of the naïve or myopic agent in deciding whether to perform a mandatory task whose cost is immediate but reward received only in the future. Following the literature for hyperbolic discounting we say that a player is naïve if her inter-temporal preference for whether to complete an assigned task is represented by the Phelps and Pollack's hyperbolic discounting utility model. We show that a naïve agent, whose present bias is below a certain gamedependant bound, is meant to complete the task in the last period. This bound offers two new insights about the naive player. First, "not all naïve players are equal" in that the long run discount factor decides the degree of naivety sufficient to procrastinate. Secondly, this shows that the range of the payoff structure plays a role in favoring procrastinating behavior. Finally, an application of naive hyperbolic discounting for an evacuation model is constructed. The peer effects research is concerned with testing the hypothesis that an agent's decision of whether to evacuate during a hurricane is influenced by the fear propensity of his or her peers. To explore this human aspect of an evacuation, a simple random utility model is set up where the utility of the "agent who is not scared" is allowed to depend on the fear propensity of the group she identifies with. The resulting binary choice model derived contains a real key parameter measuring the peer effect. Using data from Hurricane Floyd, we estimate that a positive peer effect exists in the sense that the larger the fear propensity of the peer group, the more attractive an evacuation. This finding suggests that policies aimed at creating strong awareness of hurricane dangers before the hurricane season can have a substantial effect on the population's evacuation rate via their multiplying effects. B. Disclaimer The contents of this report reflect the views of the authors, who are solely responsible for the facts and the accuracy of the material and information presented herein. This document is disseminated under the sponsorship of the U.S. Department of Transportation University Transportation Centers Program and GCCETR in the interest of information exchange. The U.S. Government and GCCETR assume no liability for the contents or use thereof. The contents do not necessarily reflect the official views of the U.S. Government or GCCETR. This report does not constitute a standard, specification, or regulation. 1 Executive Summary Our goal is develop an integrated approach to understanding the evacuation decision of individuals in the face of natural disasters. The study focuses on two behavioral phenomena that have increasingly important in the last decade: hyperbolic discounting and peer effects. Hyperbolic discounting introduces a strong preference for present utility or present bias, and is particularly relevant for tasks where the reward may be in the present and costs are incurred in the future (or vice-versa). An example of this is quitting smoking: the enjoyment of current consumption prolongs quitting despite the future health costs associated with the habit. The evacuation decision also has the similar characteristics: costs to evacuate are incurred today, while the benefits of safety and survival are only received in the future when the event is over. Peer effects suggest that while individuals have personal beliefs about decisions, they are influenced by others (social learning), which according to anecdotal evidence plays a key role in the evacuation decision. Due to lack of data on time preferences of individuals, the relationship between hyperbolic discounting and evacuation is studied theoretically, while peer effects (in terms of fear) are investigated empirically using data from Hurricane Floyd. The model of hyperbolic discounting considers a finite horizon decision problem with an additive utility function. The model incorporates a long run discount factor δ and a parameter for immediate gratification denoted by β. Agents earn v t a reward for completion of the task in period t while c t indicates the cost for performing the task in period t. Time consistent players can be thought of as the control group for our analysis since they always value well-being equally regardless of the point in time they are asked to make the decision. In other words they do not have a present bias. We consider two types of individuals who have a present bias, i.e., exhibit self-control problems: naïve or sophisticated agents. Naïve players do not accurately predict their self-control problem. Sophisticated players realize they will not act how they would like to in the future (i.e., are aware of their self control problem), and change their current actions accordingly. An example in the report illustrates the difference between all three types. The focus of this study is on the naïve players. We find that the long run discount determines the degree of naivety sufficient to procrastinate and the effect of impatience on procrastination is determined by the "maximum cost per excess reward" ratio. We show that procrastination is nurtured by low payoff variability. Finally, when the percentage increase in the cost in the last period is less than the first period then a naïve player with a reasonable long run discount will never be time consistent. In the peer effects model, we include the fear level of the peer group into the cost-benefit analysis for two reasons: peers' fear may act as risk perception for those with limited knowledge of hurricanes' potential damage and individuals may simply value social 3 mimicking because of its utility. We find there is a positive peer effect, where the larger the fear propensity of the peer group, the more attractive the evacuation. The data was collected in January 1999 from a random sample of households from the North Carolina Coastal region, and again after Hurricane Floyd in early 2000. It includes information on attitudes about safety during hurricane watch, whether they evacuated, and socioeconomic characteristics about the household. In the empirical model the decision to evacuate depends on the individual's costs and benefits as well as the behavior of their peers. The first model concentrates on the evacuation decision of an agent who is not scared and who makes the evacuation decision based on own attributes and peer effects. The estimator for this is derived from the smoothed maximum score estimator introduced by We find that for an individual who is not scared of hurricanes: (i) receiving an evacuation order increases the probability of evacuating, (ii) an additional year of schooling increases the probability of evacuating, (iii) owning a house decreases the probability of evacuating, (iv) living in a mobile home increases the probability of evacuating, (v) being one year older decreases the probability of evacuating, (vi) being married increases the probability of evacuating, (vii) being white increases the probability of evacuating, (viii) being a female increases the probability of evacuating, and (ix) living an additional year in the region decreases the probability of evacuating. Interestingly, a 10% increase in the population of scared individuals in an individual's group has the same effect on the probability of evacuating as an additional year of schooling. In terms of policy our research suggests that increasing awareness about the danger from hurricanes using various channels can have a substantial effect on the number of evacuees; peer effects can amplify the impact of information provided by policy makers. 4 An Integrated Approach to Modeling Evacuation Behavior: Hyperbolic Discounting and Peer Effects ABSTRACT: A spate of recent hurricanes and other natural disasters have drawn a lot of attention to the evacuation decision of individuals. Here we focus on evacuation models that incorporate two economic phenomena that seem to be increasingly important in explaining human behavior: hyperbolic discounting and peer effects. The first part of this research explores the behavior of the naïve or myopic agent in deciding whether to perform a mandatory task whose cost is immediate but reward received only in the future. Following the literature for hyperbolic discounting, we say that a player is naïve if her inter-temporal preference for whether to complete an assigned task is represented by the Phelps and Pollack's hyperbolic discounting utility model. We show that a naïve agent, whose present bias is below a certain game-dependant bound, is meant to complete the task in the last period. This bound offers two new insights about the naïve player. First, "not all naïve players are equal" in that the long run discount factor decides the degree of naivety sufficient to procrastinate. Secondly, this shows that the range of the payoff structure plays a role in favoring procrastinating behavior. Finally, an application of naive hyperbolic discounting for an evacuation model is constructed. The peer effects research is concerned with testing the hypothesis that an agent's decision of whether to evacuate during a hurricane is influenced by the fear propensity of his or her peers. To explore this human aspect of an evacuation, a simple random utility model is set up where the utility of the "agent who is not scared" is allowed to depend on the fear propensity of the group she identifies with. The resulting binary choice model derived contains a real key parameter measuring the peer effect. Using data from Hurricane Floyd, we estimate that a positive peer effect exists in the sense that the larger the fear propensity of the peer group, the more attractive an evacuation. This finding suggests that policies aimed at creating strong awareness of hurricane dangers before the hurricane season can have a substantial effect on the population's evacuation rate via their multiplying effects. 5

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There is a traditional Zulu saying, “umuntu ngumuntu ngabantu, ” or that, “a person is a person through other persons. ” Indeed, while different cultures and reference groups have disparate social norms that define interactions between their members, interactions of individuals within all reference groups inevitably impact the choices of their members. As

An early version of this article was presented at the CIRANO-CIREQ Conference on the Econometrics of interactions (October 2009). Our thanks to conference participants, in particular to Lung-fei Lee for helpful comments. We wish to thank the Quebec Ministry of Education, Recreation and Sports (MERS) for providing the data, in particular Raymond Ouellette and Jeannette Ratté for their assistance in obtaining and interpreting the data used in this study. The views expressed is this paper are solely our own and do not necessarily reflect the opinions of

Die ZBW räumt Ihnen als Nutzerin/Nutzer das unentgeltliche, räumlich unbeschränkte und zeitlich auf die Dauer des Schutzrechts beschränkte einfache Recht ein, das ausgewählte Werk im Rahmen der unter

Die ZBW räumt Ihnen als Nutzerin/Nutzer das unentgeltliche, räumlich unbeschränkte und zeitlich auf die Dauer des Schutzrechts beschränkte einfache Recht ein, das ausgewählte Werk im Rahmen der unter