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Understanding Peer Effects: On the Nature, Estimation and Channels of Peer Effects

Author

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  • Feld, Jan

    () (School of Economics and Finance, Victoria University of Wellington)

  • Zölitz, Ulf

    () (Department of Economics, Maastricht University)

Abstract

This paper estimates peer effects in a university context where students are randomly assigned to sections. While students benefit from better peers on average, low-achieving students are harmed by high-achieving peers. Analyzing students’ course evaluations suggests that peer effects are driven by improved group interaction rather than adjustments in teachers’ behavior or students' effort. We further show, building on Angrist (2014), that classical measurement error in a setting where group assignment is systematic can lead to substantial overestimation of peer effects. With random assignment, as is the case in our setting, estimates are only attenuated.

Suggested Citation

  • Feld, Jan & Zölitz, Ulf, 2014. "Understanding Peer Effects: On the Nature, Estimation and Channels of Peer Effects," Working Papers in Economics 596, University of Gothenburg, Department of Economics, revised Oct 2015.
  • Handle: RePEc:hhs:gunwpe:0596
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    File URL: https://gupea.ub.gu.se/handle/2077/36036
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    References listed on IDEAS

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    8. Jan Feld & Nicolás Salamanca & Daniel S. Hamermesh, 2016. "Endophilia or Exophobia: Beyond Discrimination," Economic Journal, Royal Economic Society, vol. 126(594), pages 1503-1527, August.
    9. Timothy Conley & Nirav Mehta & Ralph Stinebrickner & Todd Stinebrickner, 2015. "Social Interactions, Mechanisms, and Equilibrium: Evidence from a Model of Study Time and Academic Achievement," NBER Working Papers 21418, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Olivier Marie & Ulf Zölitz, 2017. "“High” Achievers? Cannabis Access and Academic Performance," Review of Economic Studies, Oxford University Press, vol. 84(3), pages 1210-1237.
    2. Elsner, Benjamin & Isphording, Ingo, 2015. "Big Fishes in Small Ponds: Ability Rank and Human Capital Investment," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112928, Verein für Socialpolitik / German Economic Association.
    3. Paul Frijters & Asadul Islam & Debayan Pakrashi, 2016. "Can we select the right peers in Indian Education? Evidence from Kolkata," Monash Economics Working Papers 39-16, Monash University, Department of Economics.
    4. Hill, Andrew J., 2017. "The positive influence of female college students on their male peers," Labour Economics, Elsevier, vol. 44(C), pages 151-160.
    5. Lusher, Lester & Yasenov, Vasil, 2016. "Gender Performance Gaps: Quasi-Experimental Evidence on the Role of Gender Differences in Sleep Cycles," IZA Discussion Papers 10012, Institute for the Study of Labor (IZA).
    6. Leonardi, Marco & Pellizzari, Michele & Tabasso, Domenico, 2015. "Wage compression within the firm," CEPR Discussion Papers 10770, C.E.P.R. Discussion Papers.
    7. Benjamin Elsner & Ingo E. Isphording, 2017. "A Big Fish in a Small Pond: Ability Rank and Human Capital Investment," Journal of Labor Economics, University of Chicago Press, vol. 35(3), pages 787-828.
    8. Feld, Jan & Sauermann, Jan & De Grip, Andries, 2015. "Estimating the Relationship between Skill and Overconfidence," Working Papers in Economics 627, University of Gothenburg, Department of Economics.
    9. Erik O. Kimbrough & Andrew D. McGee & Hitoshi Shigeoka, 2017. "How Do Peers Impact Learning? An Experimental Investigation of Peer-to-Peer Teaching and Ability Tracking," NBER Working Papers 23439, National Bureau of Economic Research, Inc.
    10. repec:eee:soceco:v:68:y:2017:i:c:p:18-24 is not listed on IDEAS
    11. Dasgupta, Utteeyo & Mani, Subha & Sharma, Smriti & Singhal, Saurabh, 2017. "Cognitive, Socioemotional and Behavioral Returns to College Quality," IZA Discussion Papers 10701, Institute for the Study of Labor (IZA).
    12. Feld, Jan & Sauermann, Jan & de Grip, Andries, 2017. "Estimating the relationship between skill and overconfidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 68(C), pages 18-24.
    13. Manuel Arellano & Stéphane Bonhomme, 2017. "Nonlinear Panel Data Methods for Dynamic Heterogeneous Agent Models," Annual Review of Economics, Annual Reviews, pages 471-496.
    14. Michael Insler & Jimmy Karam, 2016. "Do Sports Crowd Out Books? The Impact of Intercollegiate Athletic Participation on Grades," Departmental Working Papers 50, United States Naval Academy Department of Economics.
    15. Crawford, Gregory S. & Deer, Lachlan & Smith, Jeremy & Sturgeon, Paul, 2017. "The Regulation of Public Service Broadcasters: Should there be more advertising on television?," CEPR Discussion Papers 12428, C.E.P.R. Discussion Papers.
    16. Hahn, Youjin & Hassani Mahmooei, Behrooz & Islam, Asadul & Patacchini, Eleonora & Zenou, Yves, 2016. "Do Friends Improve Female Education? The Case of Bangladesh," CEPR Discussion Papers 11615, C.E.P.R. Discussion Papers.
    17. Mengel, Friederike & Sauermann, Jan & Zölitz, Ulf, 2017. "Gender Bias in Teaching Evaluations," IZA Discussion Papers 11000, Institute for the Study of Labor (IZA).
    18. Caterina Calsamiglia & Annalisa Loviglio, 2016. "Grading On A Curve: When Having Good Peers Is Not Good," Working Papers 940, Barcelona Graduate School of Economics.
    19. Thiemann, Petra, 2017. "The Persistent Effects of Short-Term Peer Groups in Higher Education," IZA Discussion Papers 11024, Institute for the Study of Labor (IZA).
    20. Merlino, Luca Paolo & Steinhardt, Max F. & Wren-Lewis, Liam, 2016. "More than Just Friends? School Peers and Adult Interracial Relationships," IZA Discussion Papers 10319, Institute for the Study of Labor (IZA).
    21. Adriana D. Kugler & Catherine H. Tinsley & Olga Ukhaneva, 2017. "Choice of Majors: Are Women Really Different from Men?," NBER Working Papers 23735, National Bureau of Economic Research, Inc.
    22. Kugler, Adriana & Tinsley, Catherine H. & Ukhaneva, Olga, 2017. "Choice of Majors: Are Women Really Different from Men?," IZA Discussion Papers 10947, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Peer effects; higher education; estimation bias;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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