Advani, AN; (2017) Essays in the Economics of Networks. Doctoral thesis , UCL (University College London).

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Abstract

This thesis comprises four papers on the economics of networks. The first provides a survey of methods for econometric work with networks, summarising what is known in the economics literature, and incorporating methods from other fields including mathematics, computer science, and sociology. The second explains why informal insurance networks are able to provide consumption smoothing, but not credit for investment. It develops a dynamic contracting model to explain the difference in these motivations, generates from this a number of testable predictions, and then provides evidence in support of the model using data from Bangladesh. The third examines the trade-off between economic and cultural incentives for migrants. It develops a model of network formation combined with a game-on-a-network, to capture this trade-off. The model's predictions are then tested using data from US censuses in the early 1900s. The fourth studies the impact of tax audits by HMRC, the UK tax authority, on the future tax reporting behaviour of self-assessment taxpayers. It shows that income sources which are not also reported by a third party are more likely to be initially underreported, and that being audited increases future reports for a number of years. Future work in this area will study the spillover effects of the audits onto taxpayers connected to those who are audited, where networks of connections can be measured by sharing a place of residence, place of work, being partners in a common business, and sharing a common accountant.

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