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

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  • Feld, Jan
  • Zölitz, Ulf

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, 2015. "Understanding Peer Effects: On the Nature, Estimation and Channels of Peer Effects," Working Paper Series 4789, Victoria University of Wellington, School of Economics and Finance.
    • Handle: RePEc:vuw:vuwecf:4789
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    File URL: http://researcharchive.vuw.ac.nz/handle/10063/4789
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    More about this item

    Keywords

    Peer effects; Higher education; Measurement error; Estimation bias;
    All these keywords.

    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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