Endogenous peer effects: local aggregate or local average?

• Develop a unified model embedding different behavioral mechanisms of social interactions.
• Design a statistical model selection test to discriminate between them.
• Find that there are strong social multiplier effects in sport activities.
• For education, social norms matter the most.
• For education, group-based policies are more effective.

We develop a unified model embedding different behavioral mechanisms of social interactions and design a statistical model selection test to differentiate between them in empirical applications. This framework is applied to study peer effects in education (effort in studying) and sport activities for adolescents in the United States. We find that, for education, students tend to conform to the social norm of their friends while, for sport activities, both the social multiplier and the social norm effect matter.