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

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  • 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 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 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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  • Ghazala Azmat & Nagore Iriberri, 2009. "The Importance of Relative Performance Feedback Information: Evidence from a Natural Experiment using High School Students," CEP Discussion Papers dp0915, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp0915
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    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - 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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