OxTalks will soon move to the new Halo platform and will become 'Oxford Events.' There will be a need for an OxTalks freeze. This was previously planned for Friday 14th November – a new date will be shared as soon as it is available (full details will be available on the Staff Gateway).
In the meantime, the OxTalks site will remain active and events will continue to be published.
If staff have any questions about the Oxford Events launch, please contact halo@digital.ox.ac.uk
Homophily based on observables is widespread in networks. Therefore, homophily based on unobservables (fixed effects) is also likely to be an important determinant of the interaction outcomes. Failing to properly account for latent homophily (and other complex forms of unobserved heterogeneity, in general) can result in inconsistent estimators and misleading policy implications. To address this concern, I consider a network model with nonparametric unobserved heterogeneity, leaving the role of the fixed effects and the nature of their interaction unspecified. I argue that the outcomes of the interactions can be used to identify agents with the same values of the fixed effects. The variation in the observed characteristics of such agents allows me to identify the effects of the covariates, while controlling for the impact of the fixed effects. Building on these ideas, I construct several estimators of the parameters of interest and characterize their large sample properties. The suggested approach is not specific to the network context and applies to general two-way models with nonparametric unobserved heterogeneity, including large panels. A Monte-Carlo experiment illustrates the usefulness of the suggested approaches and supports the large sample theory findings.