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The Use of Instrumental Variables in Peer Effects Models

2019/02/04 by Stephanie von Hinke, George Leckie, Cheti Nicoletti
Social Sciences · #Higher Education Research Studies #Intergenerational and Educational Inequality Studies #School Choice and Performance

paper · pdf · doi:10.1111/obes.12299

openalex publication_date 2019/02/04 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01

Abstract

Instrumental variables are often used to identify peer effects. This paper shows that instrumenting the 'peer average outcome' with 'peer average characteristics' requires the researcher to include the instrument at the individual level as an explanatory variable. We highlight the bias that occurs when failing to do this.

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