Bagging the Network
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arXiv
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| Format: | Preprint |
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2024
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| _version_ | 1866918477597507584 |
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| author | Li, Ming Shi, Zhentao Zheng, Yapeng |
| author_facet | Li, Ming Shi, Zhentao Zheng, Yapeng |
| contents | We develop a unified estimation and inference framework for dyadic network formation with individual fixed effects, covering both transferable-utility (TU) and nontransferable-utility (NTU) links under general link functions. Under NTU, bilateral consent makes the fixed effects non-additive and the log-likelihood non-concave in the high-dimensional fixed effects, so differencing and profile-likelihood methods fail. We combine a joint method-of-moments initial estimator, a Le Cam one-step refinement, and a split-network jackknife bagging step that removes the incidental parameter bias without inflating variance. The resulting homophily estimator is asymptotically normal, unbiased, and attains the Cramér--Rao lower bound without requiring the log-likelihood to be concave in the fixed effects; we extend the theory to average partial effects and establish robustness to link-function misspecification. Simulations under both TU and NTU designs confirm these predictions. Applied to Thai village networks (TU), kinship and wealth differences both increase linking; in the Nyakatoke risk-sharing network (NTU), wealth differences have no significant effect, mirroring the two regimes' distinct logics. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2410_23852 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Bagging the Network Li, Ming Shi, Zhentao Zheng, Yapeng Econometrics We develop a unified estimation and inference framework for dyadic network formation with individual fixed effects, covering both transferable-utility (TU) and nontransferable-utility (NTU) links under general link functions. Under NTU, bilateral consent makes the fixed effects non-additive and the log-likelihood non-concave in the high-dimensional fixed effects, so differencing and profile-likelihood methods fail. We combine a joint method-of-moments initial estimator, a Le Cam one-step refinement, and a split-network jackknife bagging step that removes the incidental parameter bias without inflating variance. The resulting homophily estimator is asymptotically normal, unbiased, and attains the Cramér--Rao lower bound without requiring the log-likelihood to be concave in the fixed effects; we extend the theory to average partial effects and establish robustness to link-function misspecification. Simulations under both TU and NTU designs confirm these predictions. Applied to Thai village networks (TU), kinship and wealth differences both increase linking; in the Nyakatoke risk-sharing network (NTU), wealth differences have no significant effect, mirroring the two regimes' distinct logics. |
| title | Bagging the Network |
| topic | Econometrics |
| url | https://arxiv.org/abs/2410.23852 |