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The Importance of Relative Performance Feedback Information: Evidence from a Natural Experiment using High School Students

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Author Info
Ghazala Azmat ()
Nagore Iriberri ()
Abstract

We study the effect of providing relative performance feedback information on performance under piece-rate incentives. A natural experiment that took place in a high school offers an unusual opportunity to test this effect in a real-effort setting. For one year only, students received information that allowed them to know whether they were performing above (below) the class average as well as the distance from this average. We exploit a rich panel data set and find that the provision of this information led to an increase of 5% in students’ grades. Moreover, the effect was significant for the whole distribution. However, once the information was removed the effect disappeared. To rule out the concern that the effect may be artificially driven by teachers within the school, we verify our results using national level exams (externally graded) for the same students, and the effect remains.

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Publisher Info
Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1148.

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Date of creation: Jan 2009
Date of revision: Jul 2009
Handle: RePEc:upf:upfgen:1148

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Related research
Keywords: School performance; relative performance; piece-rate; feedback; natural experiment; social comparison; self-perception; competitive preferences;

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Find related papers by JEL classification:
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

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    Other versions:
    • Benny Moldovanu & Aner Sela & Xianwen Shi, 2005. "Contests for Status," Discussion Papers 139, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
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  9. Eriksson, Tor & Poulsen, Anders & Villeval, Marie-Claire, 2008. "Feedback and Incentives: Experimental Evidence," IZA Discussion Papers 3440, Institute for the Study of Labor (IZA). [Downloadable!]
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  10. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory Of Fairness, Competition, And Cooperation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 817-868, August. [Downloadable!] (restricted)
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  12. Hanushek, Eric A, 1996. "Measuring Investment in Education," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 9-30, Fall. [Downloadable!] (restricted)
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  14. Robert H. Frank, 1984. "Interdependent Preferences and the Competitive Wage Structure," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 510-520, Winter. [Downloadable!] (restricted)
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