Network ANOVA random effects models for node attributes

Abstract

This paper develops a subgraph network random effects error components structure for network data to perform analysis of variance. In particular, it proposes a model for evaluating the network interdependence of nodes attributes allowing for edge and triangle specific components. The latter serve as a basal model for modeling more general network effects. Consistent estimators of the variance components and Lagrange Multiplier specification tests for evaluating the appropriate model of random components in networks structures is proposed. Monte Carlo simulations show that the tests have good performance in finite samples. The proposed tests is applied to the unsecured (Call) interbank market network in Argentina.