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Homophily, or the idea of "birds of a feather ock together", [30] is a fundamental and pervasive phenomenon in social networks, and refers to the tendency of individuals to form relationships with others that have similar attributes, behaviors or opinions. Homophily commonly occurs in empirical network data, and has been extensively studied as a sociological phenomenon. McPherson and Smith [37] provide an in depth review of homophily literature. The emergence of homophily during network formation has be explained using agent based models,and in economics [14] by incorporating chance, choice, and tie formation costs.

In sociological literature, homophily is estimated using the homophily index Hi, and Coleman's inbreeding homophily index, IHi. If wi is the relative fraction of individuals within the community with opinion i, Hi is de�ned as the averaged ratio of same-type ties to total ties for individuals with opinion type i, and IHi is measured as the amount of bias with respect to baseline homophily as it relates to the maximum possible bias (i.e., the term 1 􀀀 wi) [14, 37]. For an invariant the network structure, the relationship between homophily index Hi and relative fraction wi reects the type of homophily. If wi > wj implies Hi > Hj , then the parameters satisfy relative homophily. If Hi = wi for all i, then the parameters satisfy baseline homophily. If Hi > wi for type i, then the parameters satisfy inbreeding-homophily, i.e. the tendency of friendships to be biased towards own types beyond the e�ect of relative population size. Finally, in some cases, the opposite may be true, such that Hi < wi for type i, wherein the parameters satisfy heterophily and people of type i are biased towards having di�erent-type friendships. In terms of the Coleman index, inbreeding homophily for type i exists if and only if IHi > 0, and inbreeding heterophily for type i if and only if IHi < 0. The inbreeding homophily index is 0 if there is pure baseline homophily, and 1 if a group completely inbreeds.