Multivariate choice and identi…cation of social interactions. CEPR discussion paper No

Abstract We investigate the identi…cation and estimation of peer e¤ects in a network where individuals make a multitude of interdependent choices. First, we generalize the theoretical socialinteraction model to allow for multiple choices and provide a micro-foundation for the proposed econometric simultaneous equations network model. Second, we provide a set of identi…cation conditions of peer e¤ects in contexts of multiple choices. Third, we consider the empirical salience of the proposed model, and show that considering more than one activity changed the signi…cance and magnitude of the estimated peer e¤ects. Therefore, we believe that empirical peer e¤ects research should be carefully constructed to ensure that the model re ‡ects the full gamut of choices that individuals make