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Controlling for the endogeneity of peer substance use on adolescent alcohol and tobacco use
Author(s) -
Norton Edward C.,
Lindrooth Richard C.,
Ennett Susan T.
Publication year - 1998
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/(sici)1099-1050(199808)7:5<439::aid-hec362>3.0.co;2-9
Subject(s) - endogeneity , instrumental variable , substance use , psychology , selection bias , peer group , probit model , ordered probit , econometrics , environmental health , medicine , economics , developmental psychology , statistics , clinical psychology , mathematics
Abstract This study examines whether the effects of peer substance use on adolescent alcohol and tobacco use are due to endogeneity of adolescents selecting their peer group. We analyzed data collected for a longitudinal analysis of a drug‐use prevention programme for upper elementary school students. We used a two‐step probit regression to control for the potentially endogenous explanatory variable peer substance use. Rigorous tests of endogeneity and the validity of the instrumental variables showed that controlling for the endogeneity of peer substance use to reduce bias is not worth the reduction in mean squared error in these data. Peer substance use has a positive and significant effect on adolescent substance use for both drinking and smoking. These results imply that peer influence is empirically more important than peer selection (endogeneity) in our sample of adolescents in grades 6–9. Living in a single‐parent family was by far the strongest predictor of adolescent drinking and smoking. © 1998 John Wiley & Sons, Ltd.