2022/03/29 by D. W. Hughes, Hughes, David W.
Physics and Astronomy · #Complex Network Analysis Techniques #Econometrics (econ.EM) #FOS: Economics and business
paper · pdf · doi:10.48550/arxiv.2203.15603
openalex publication_date 2022/03/29 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01
I introduce a new method for bias correction of dyadic models with agent-specific fixed effects, including the dyadic link formation model with homophily and degree heterogeneity. The proposed approach uses a jackknife procedure to deal with the incidental parameters problem. The method can be applied to both directed and undirected networks, allows for non-binary outcome variables, and can be used to bias correct estimates of average effects and counterfactual outcomes. I also show how the jackknife can be used to bias correct fixed-effect averages over functions that depend on multiple nodes, e.g. triads or tetrads in the network. As an example, I implement specifica- tion tests for dependence across dyads, such as reciprocity or transitivity. Finally, I demonstrate the usefulness of the estimator in an application to a gravity model for import/export relationships across countries.