Adam Smith Business School

Dr Filipp Ushchev, Université Libre De Bruxelles

"Toward a General Theory of Peer Effects"
Tuesday, 6 June. 4 pm
Room 540, Main Building

Abstract

There is substantial empirical evidence showing that peer effects matter in many activities. The workhorse model in empirical work on peer effects is the linear-in-means (LIM) model, whereby it is assumed that agents are linearly affected by the mean action of their peers. We provide two different theoretical models (based on spillovers and on conformism behaviour) that micro-found the LIM model and show that they have very different policy implications. We also develop a new general model of peer effects that relaxes the assumptions of linearity and mean peer behaviour, and that encompasses the spillover, conformist model, and LIM model as special cases. Then, using data on adolescent activities in the U.S., we structurally estimate this model. We find that for GPA, social clubs, self-esteem, and exercise, the spillover effect strongly dominates, while for risky behaviour, study effort, fighting, smoking, and drinking, conformism plays a stronger role. We also find that for many activities, individuals do not behave according to the LIM model. We run some counterfactual policies and show that imposing the mean action as an individual social norm is misleading and leads to incorrect policy implications.

Bio

Philip Ushchev is a researcher at ECARES, ULB. Starting 1 October 2023, he will be a Professor of Information Economics, Regulation and Public Policy at ECARES, ULB.
His fields of interest are applied general equilibrium (macro, trade), industrial organization, networks, and urban economics.

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For further information, please contact business-school-research@glasgow.ac.uk

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First published: 3 April 2023