  Latent variable models are frequently used to identify structure in
dichotomous network data, in part because they give rise to a Bernoulli product
likelihood that is both well understood and consistent with the notion of
exchangeable random graphs. In this article we propose conservative confidence
sets that hold with respect to these underlying Bernoulli parameters as a
function of any given partition of network nodes, enabling us to assess
estimates of 'residual' network structure, that is, structure that cannot be
explained by known covariates and thus cannot be easily verified by manual
inspection. We demonstrate the proposed methodology by analyzing student
friendship networks from the National Longitudinal Survey of Adolescent Health
that include race, gender, and school year as covariates. We employ a
stochastic expectation-maximization algorithm to fit a logistic regression
model that includes these explanatory variables as well as a latent stochastic
blockmodel component and additional node-specific effects. Although
maximum-likelihood estimates do not appear consistent in this context, we are
able to evaluate confidence sets as a function of different blockmodel
partitions, which enables us to qualitatively assess the significance of
estimated residual network structure relative to a baseline, which models
covariates but lacks block structure.
