Contributor

Wan Zhang

Subject Area

Economics

Abstract

This dissertation explores the econometric analysis of social interactions and decision-making. The first two chapters advance econometric methodology by addressing key challenges in identifying and estimating peer effects, specifically tackling issues related to partial network data and endogenous link formation. The third chapter presents an empirical analysis of parental over-aspiration and its impact on children's academic outcomes, using monotone instrumental variables constructed from social network structures.

Chapter 1 is "Identification and Estimation of Discrete Choice Models with Spillovers Using Partial Network Data". This paper investigates peer effects in discrete choice models with incomplete data on social links. We consider an undirected dyadic link formation model in which connections arise from homophily—similarities in individual characteristics—and unobserved individual fixed effects. Homophily effects are identified using the observed patterns of link formation among tetrads (groups of four individuals), while the distribution of individual fixed effects is identified through the configurations observed among triads (groups of three individuals). I propose an estimation strategy based on the estimated link formation probabilities to study peer effects on individual decision-making and establish its large sample properties. Simulations illustrate that the finite sample performance of the estimator is close to that obtained when the true network were known. Using data on household microfinance participation in rural India from Banerjee et al. (2013), where network data are available, I detect positive peer effects even with partial network data.

Chapter 2 is "Inference for Social Interactions in Large Endogenous Networks" (co-authored with Wan Zhang). We study the identification and estimation of social interactions in large endogenous networks. Our analysis focuses on binary-action games of incomplete information in which an agent's expected payoff relies on her characteristics, peers' average characteristics, the average of her beliefs about peers' actions, and some preference shocks. Endogeneity in networks results from unobserved characteristics that affect both link formation and individual decision-making. To identify the utility functions, we express the unobserved characteristics as some unknown function of observed variables and address the endogeneity issue through a control function approach. The identification strategy holds even if multiple equilibria exist. We employ the strategy to develop a semiparametric estimator and assess finite-sample performance through Monte Carlo simulations.

Chapter 3 is "Echoes of Icarus: How Parental Over-Aspiration Shapes Children's Academic Success". This paper documents the negative influence of overly ambitious parental aspirations on children's academic outcomes, utilizing data from the Education Longitudinal Study 2002. After controlling for family socioeconomic status, I find that parents with better education are less likely to form overly ambitious aspirations, which represents a new channel to account for the positive effects of parental education on children's academic performances. To address the possibility that parental aspirations are endogenous, I construct instruments based on children's social network. For robustness, I use an alternative approach based on bounding the effect of parental aspirations under weaker assumptions. The results are consistent across both approaches.

Degree Date

Spring 2025

Document Type

Dissertation

Degree Name

Ph.D.

Department

Economics

Advisor

Daniel Millimet

Second Advisor

Hao Dong

Third Advisor

Ömer Özak

Fourth Advisor

Yonghong An

Fifth Advisor

Haiqing Xu

Number of Pages

170

Format

.pdf

Creative Commons License

Creative Commons Attribution-Noncommercial 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial 4.0 License

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