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Estimating spillovers using panel data, with an application to the classroom

Publication ,  Journal Article
Arcidiacono, P; Foster, G; Goodpaster, N; Kinsler, J
Published in: Quantitative Economics
November 1, 2012

Obtaining consistent estimates of spillovers in an educational context is hampered by at least two issues: selection into peer groups and peer effects emanating from unobservable characteristics. We develop an algorithm for estimating spillovers using panel data that addresses both of these problems. The key innovation is to allow the spillover to operate through the fixed effects of a student's peers. The only data requirements are multiple outcomes per student and heterogeneity in the peer group over time. We first show that the nonlinear least squares estimate of the spillover parameter is consistent and asymptotically normal for a fixed T. We then provide an iterative estimation algorithm that is easy to implement and converges to the nonlinear least squares solution. Using University of Maryland transcript data, we find statistically significant peer effects on course grades, particularly in courses of a collaborative nature. We compare our method with traditional approaches to the estimation of peer effects, and quantify separately the biases associated with selection and spillovers through peer unobservables. © 2012 Peter Arcidiacono, Gigi Foster, Natalie Goodpaster, and Josh Kinsler.

Duke Scholars

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Published In

Quantitative Economics

DOI

EISSN

1759-7331

ISSN

1759-7323

Publication Date

November 1, 2012

Volume

3

Issue

3

Start / End Page

421 / 470

Related Subject Headings

  • 3802 Econometrics
  • 3801 Applied economics
  • 1403 Econometrics
 

Citation

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Arcidiacono, P., Foster, G., Goodpaster, N., & Kinsler, J. (2012). Estimating spillovers using panel data, with an application to the classroom. Quantitative Economics, 3(3), 421–470. https://doi.org/10.3982/QE145
Arcidiacono, P., G. Foster, N. Goodpaster, and J. Kinsler. “Estimating spillovers using panel data, with an application to the classroom.” Quantitative Economics 3, no. 3 (November 1, 2012): 421–70. https://doi.org/10.3982/QE145.
Arcidiacono P, Foster G, Goodpaster N, Kinsler J. Estimating spillovers using panel data, with an application to the classroom. Quantitative Economics. 2012 Nov 1;3(3):421–70.
Arcidiacono, P., et al. “Estimating spillovers using panel data, with an application to the classroom.” Quantitative Economics, vol. 3, no. 3, Nov. 2012, pp. 421–70. Scopus, doi:10.3982/QE145.
Arcidiacono P, Foster G, Goodpaster N, Kinsler J. Estimating spillovers using panel data, with an application to the classroom. Quantitative Economics. 2012 Nov 1;3(3):421–470.
Journal cover image

Published In

Quantitative Economics

DOI

EISSN

1759-7331

ISSN

1759-7323

Publication Date

November 1, 2012

Volume

3

Issue

3

Start / End Page

421 / 470

Related Subject Headings

  • 3802 Econometrics
  • 3801 Applied economics
  • 1403 Econometrics