Second-Order Peer Instrumentation (G²X Identification)

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In Simple Words

Imagine trying to prove whether a student's study habits directly improve a classmate's grades. Instead of measuring the classmate directly, researchers look at the background traits of the classmate's friends from another school—people who affect the classmate but have no direct contact with the original student.

Research question

In social network econometric models, identifying direct peer influence is obstructed by simultaneous outcome determination (reflection) and unobserved homophily in link formation.

Participants

N = 1,016 active Milestone 0 completers across virtual interaction arms in 49 African countries.

Study Design

Two-stage Instrumental Variable (IV) OLS regression using baseline characteristics of second-degree network neighbors ($G^2X$) as instruments for direct peer outcomes ($Gy$).

Results

In Large-Country Virtual-Within networks, peer outcomes increase proposal submission rates ($\beta = 0.533, p < 0.01$). In Small-Country Virtual-Across networks, peer outcomes increase intensive business proposal quality ($\beta = 0.476, p < 0.01$).

Takeaway

Instrument direct peer influences using exogenous baseline traits of two-step network neighbors when estimating social spillover effects in non-saturated social networks.

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Plain-English glossary

Original explanations, informed by the references below. Examples are illustrations, not data from the studies above. The research text stays unchanged.

Baseline

The starting measurements in a study. Researchers use these to compare what participants were like at the start with what happens later.

ExampleBefore a training programme starts, researchers measure workers’ earnings. That first measurement is the baseline.

GET-IT glossary · Baseline characteristics ↗Read more about baseline →

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