Adam Smith Business School

Professor Arthur Lewbel (Boston College)

Estimating Social Network Models with Link Misclassification
Friday, 26 September 2025, 15:00–16:30
Room 383, Adam Smith Business School

Abstract

We propose an adjusted 2SLS estimator for social network models when the network links reported in samples are subject to two-sided misclassification errors (due, e.g., to recall errors by survey respondents, or lapses in data input). Misclassified links make all covariates endogenous, and add a new source of correlation between the structural errors and peer outcomes (in addition to simultaneity), thus invalidating conventional estimators used in the literature. We resolve these issues by adjusting endogenous peer outcomes with estimates of the misclassification rates and constructing new instruments that exploit properties of the noisy network measures. Simulation results confirm our adjusted 2SLS estimator corrects the bias from a naive, unadjusted 2SLS estimator which ignores misclassification and uses conventional instruments. We apply our method to study peer effects in household decisions to participate in a microfinance program in Indian villages.

Biography

Arthur Lewbel is the Barbara A. and Patrick E. Roche Professor of Economics at Boston College. He co-edited the Journal of Business and Economic Statistics and Econometric Theory, received multiple awards including elected fellow of the Econometric Society, and has over 100 refereed publications, including 25 publications in the top 5 economics journals.

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First published: 6 September 2025