Christakis, Fowler, and their colleagues have recently published numerous articles estimating "contagion" effects in social networks (Christakis and Fowler 2007, 2008; Fowler and Christakis 2008a; Cacioppo, Fowler and Christakis 2009; Rosenquist et al. 2010; Rosenquist, Fowler and Christakis 2010; Mednick, Christakis and Fowler 2010). In response to concerns that their results are driven by homophily, Christakis and Fowler describe Monte Carlo results showing no evidence of homophily-induced bias in their statistical model's estimates of peer effects (Fowler and Christakis 2008b, N.d.; Fowler et al. N.d.). However, their simulations do not address the role of homophily in friendship retention, which may cause significant problems in longitudinal social network data. We investigate the effects of this mechanism using Monte Carlo simulations and demonstrate that homophily in friendship retention induces significant upward bias and decreased coverage levels in the Christakis and Fowler model.