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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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    References listed on IDEAS

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    1. Andreas Ammermueller & Jörn-Steffen Pischke, 2009. "Peer Effects in European Primary Schools: Evidence from the Progress in International Reading Literacy Study," Journal of Labor Economics, University of Chicago Press, vol. 27(3), pages 315-348, July.
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    6. Daron Acemoglu & Joshua Angrist, 2001. "How Large are Human-Capital Externalities? Evidence from Compulsory-Schooling Laws," NBER Chapters,in: NBER Macroeconomics Annual 2000, Volume 15, pages 9-74 National Bureau of Economic Research, Inc.
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    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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