NBER Working Papers by Laura Giuliano

We study social interactions in the risky behavior of best-friend pairs in the National Longitudinal Study of Adolescent Health (Add Health). Focusing on friends who had not yet initiated a particular behavior (sex, smoking, marijuana use, truancy) by the first wave of the survey, we estimate bivariate discrete choice models for their subsequent decisions that include peer effects and unobserved heterogeneity. Social interactions can lead to multiple equilibria in friends’ choices: we consider simple equilibrium selection models as well as partial likelihood models that remain agnostic about the choice of equilibrium. Our identification strategy assumes that there is at least one individual characteristic (e.g., physical development) that does not directly affect a friend’s propensity t...