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Clean Evidence on Peer Effects

Author

Listed:
  • Armin Falk

    (University of Bonn, IZA, CEPR, and CESifo)

  • Andrea Ichino

    (European University Institute, IZA, CEPR, and CESifo)

Abstract

We study subjects who were asked to fill letters into envelopes with a remuneration independent of output. In the "pair" treatment, two subjects worked at the same time in the same room, and peer effects were possible. In the "single" treatment, subjects worked alone, and peer effects were ruled out. We find evidence of peer effects in the pair treatment because the standard deviations of output are smaller within pairs than between pairs. Moreover, average output is higher in the pair treatment: thus, peer effects raise productivity. Finally, low-productivity workers are the most sensitive to the behavior of peers.

Suggested Citation

  • Armin Falk & Andrea Ichino, 2006. "Clean Evidence on Peer Effects," Journal of Labor Economics, University of Chicago Press, vol. 24(1), pages 39-58, January.
  • Handle: RePEc:ucp:jlabec:v:24:y:2006:i:1:p:39-58
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