Malawian adolescents overestimate their HIV infection risk. Understanding why they do so is important
since such overestimation is likely to be linked to later-life outcomes. This study focuses on the influence
peers have on HIV infection expectations. I use novel school-based survey data collected in Malawi
between October 2011 and March 2012 (n ¼ 7910), which has more reliable measures of peers' HIV
infection expectations than other studies. I employ a combined instrumental variables/fixed effects
methodology designed to addresses several methodological challenges in estimating peer effects,
including self-selection of friends, the issue of unobserved environmental confounders, and the bidirectionality
of peer effects. Several tests are conducted in order to assess the robustness of the specifications.
Results suggest that a one-percentage-point increase in the mean probabilistic expectation of
HIV infection among peers increases an adolescent's own subjective expectation of infection by an
average of 0.65 percentage points. This paper shows that peer influence is greater for males than for
females. Results also suggest that the peer effects on HIV infection expectations are only statistically
significant among those lacking more complete knowledge of HIV/AIDS.