Identifying Mechanisms Underlying Peer Effects on Multiplex Networks

Hang Xiong, Diane Payne, Stephen Kinsella
2018 Journal of Artificial Societies and Social Simulation  
We separately identify two mechanisms underlying peer e ects in farm households' adoption of a new crop. A farmer can follow his peers to adopt a new crop because he learns knowledge about the new crop from them (social learning) and because he wants to avoid the damage caused by the practice conflicting with theirs (externalities). Using an agent-based model, we simulate the two mechanisms on a multiplex network consisting of two types of social relationships. The simulation model is estimated
more » ... model is estimated using detailed data of social networks, adoption and relevant socio-economic characteristics from villages in China. We find that social learning -in this case, the sharing of experiential resources -among family members and production externalities between contiguous land plots both significantly influence farmers' adoption. Furthermore, sharing of experiential resources plays a significant role in the entire di usion process and dominates the early phase, whereas externalities only matter in the late phase. This study shows the roles peer e ects play in shaping di usion can occur through di erent mechanisms and can vary as the di usion proceeds. The work also suggests that agent-based models can help disentangle the role of social interactions in promoting or hindering di usion. induce peoples' adoption. Therefore, peer e ects in the di usion of innovations o en take place through multiple channels. In this study, we test the causal e ects of two channels, i.e., social learning and externalities, on driving farmers' adoption of a new crop. . Identifying peer e ects through di erent channels is a challenging task. First, the traditional selection and reflection problems exist. The selection problem refers to the bias that peer groups are formed endogenously due to the similarities across individuals (Manski ; Goette et al. ). The reflection problem characterises the challenge that the pure peer e ects could be mingled with the influences of other factors, e.g., interdependent personal characteristics and common shocks, that could give rise to similar observed outcomes (Manski ; Bramoulle et al. ; Goldsmith-Pinkham & Imbens ). In addition, the e ects driven through di erent channels could intertwine in the di usion process, reinforcing or o setting each other (Dahl et al. ). For instance, at the same time as some farmers are informed about a new crop, those who have adopted could be sharing the experiential know-how of farming the crop. The externalities that force the non-adopters not to adopt could take place at one hand, while the tacit knowledge that helps reduce the cost to adopt is spread on the other hand. . The context we study is the di usion of a crop called Artemisia slengensis (AS) in the rural villages located in central China. AS was newly introduced into villages in and had been adopted by all households by . With a survey of the population of households in these villages, we are able to identify the three major types of relationships, namely, kinship, house neighbourhood and land plot neighbourhood (Xiong & Payne ), in each village. The village census also collects each household's adoption year. Using the naturally occurring relationships, rather than acquired relationships such as friendship, immunises our estimation of peer e ects to the selection problem . In addition, we conduct our estimation in each year of the entire di usion process. Correlated unobservables are thus less likely to bias our estimation. . Both social learning and externalities played an important role in the process that the adoption of the new crop di used. Social learning took place as farmers shared seed-stalks of AS as well as planting techniques and market information from the earlier adopters. These resources were scarce and of great value at the time. They were shared only between family members and house neighbours (o en also members of the extended family). Externalities were observed between neighbouring land plots belonging to di erent farmers. Farming AS required much more water than farming the traditional crop (i.e., cotton), and the water in the AS plots could flow or penetrate into the adjacent cotton plot and cause damage. Cotton farmers neighbouring many AS plots were therefore forced to follow suit.
doi:10.18564/jasss.3797 fatcat:l4a4zd5favd5jfhsff3olixnhq