Selection bias in estimation of peer effects in product adoption
- 주제(키워드) Panel data estimation , Peer effects , Product adoption , Selection bias
- 등재 SSCI, SCOPUS
- 발행기관 Elsevier Ltd
- 발행년도 2019
- URI http://www.dcollection.net/handler/ewha/000000156932
- 본문언어 영어
- Published As http://dx.doi.org/10.1016/j.jocm.2018.11.001
- 저작권 이화여자대학교 논문은 저작권에 의해 보호받습니다.
초록/요약
It is well recognized that consistent estimation of peer effects faces formidable identification challenges. The confounding factors the literature usually focuses on are endogenous group formation, correlated unobservables and simultaneity. In this paper, I show that another significant source of bias arises when a researcher examines peer effects in product adoption. When people differ in their valuations of a product, people with higher valuations tend to adopt earlier so that only those with increasingly lower valuations comprise the set of potential adopters as time progresses. Such an endogenous attrition over time, if not correctly accounted for, will lead to inconsistent estimates of peer effects. I present simulations to numerically demonstrate the presence and extent of such a selection bias. I also propose a simple solution to remove the bias and examine its performance. © 2018 Elsevier Ltd
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