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Peer Effects in Higher Education

  • Gordon C. Winston
  • David J. Zimmerman

This paper was prepared as a chapter for College Decisions: How Students Actually Make Them and How They Could, edited by Caroline Hoxby for publication by the University of Chicago Press for the NBER. In this chapter, we describe the potential significance of student peer effects for the economic structure and behavior of higher education. Their existence would motivate much of the restricted supply, student queuing, and selectivity - and institutional competition via merit aid and honors colleges - that we see in American higher education; their (appropriate) non-linearity could justify the resulting stratification of higher education as an efficient way to produce human capital. In addition, we use data from the College and Beyond entering class of 1989, combined with phonebook data identifying roommates, to implement a quasi-experimental empirical strategy aimed at measuring peer effects in academic outcomes. In particular, we use data on individual students' grades, SAT scores, and the SAT scores of their roommates at three schools to estimate the effect of roommates' academic characteristics on an individual's grades. The results suggest that, for two of the three schools used, students in the middle of the SAT distribution do somewhat worse in terms of grades if they share a room with a student who is in the bottom 15 percent of the SAT distribution. Students in the top of the SAT distribution appear often not to be affected by the SAT scores of their roommates. These results are similar to those reported in earlier research using data from Williams (Zimmerman) and Dartmouth (Sacerdote).

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File URL: http://sites.williams.edu/wpehe/files/2011/06/DP-64.pdf
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Paper provided by Department of Economics, Williams College in its series Williams Project on the Economics of Higher Education with number DP-64.

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Length: 42 pages
Date of creation: Jan 2003
Date of revision:
Publication status: published in College choices: The economics of where to go, when to go, and how to pay for it, 395-421. NBER Conference Report series, 2004.
Handle: RePEc:wil:wilehe:64
Contact details of provider: Postal: Williamstown, MA 01267
Phone: 413 597 2476
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Web page: http://econ.williams.edu
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  1. Gary S. Becker, 1991. "A Note on Restaurant Pricing and Other Examples of Social Influences on Price," University of Chicago - George G. Stigler Center for Study of Economy and State 67, Chicago - Center for Study of Economy and State.
  2. Arrow, Kenneth J., 1973. "Higher education as a filter," Journal of Public Economics, Elsevier, vol. 2(3), pages 193-216, July.
  3. Summers, Anita A & Wolfe, Barbara L, 1977. "Do Schools Make a Difference?," American Economic Review, American Economic Association, vol. 67(4), pages 639-52, September.
  4. Edward P. Lazear, 2001. "Educational Production," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 777-803, August.
  5. Charles T. Clotfelter, 1996. "Buying the Best: Cost Escalation in Elite Higher Education," NBER Books, National Bureau of Economic Research, Inc, number clot96-1.
  6. David J. Zimmerman, 2003. "Peer Effects in Academic Outcomes: Evidence from a Natural Experiment," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 9-23, February.
  7. Stacy Berg Dale & Alan B. Krueger, 1999. "Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables," NBER Working Papers 7322, National Bureau of Economic Research, Inc.
  8. Epple, Dennis & Romano, Richard & Sieg, Holger, 2000. "Peer Effects, Financial Aid, and Selection of Students into Colleges and Universities: An Empirical Analysis," Working Papers 00-02, Duke University, Department of Economics.
  9. Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-77, September.
  10. Basu, Kaushik, 1989. "A Theory of Association: Social Status, Prices and Markets," Oxford Economic Papers, Oxford University Press, vol. 41(4), pages 653-71, October.
  11. Melissa Osborne & Herbert Gintis & Samuel Bowles, 2001. "The Determinants of Earnings: A Behavioral Approach," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1137-1176, December.
  12. Gordon C. Winston & Kris N. Kirby & Mariana Santiesteban, 2002. "Impatience and grades: Delay-discount rates correlate negatively with college GPA," Williams Project on the Economics of Higher Education DP-63, Department of Economics, Williams College.
  13. Todd Stinebrickner & Ralph Stinebrickner, 2001. "Peer Effects Among Students from Disadvantaged Backgrounds," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20013, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  14. Caroline Hoxby, 2000. "Peer Effects in the Classroom: Learning from Gender and Race Variation," NBER Working Papers 7867, National Bureau of Economic Research, Inc.
  15. Donald Robertson & James Symons, 2003. "Do Peer Groups Matter? Peer Group versus Schooling Effects on Academic Attainment," Economica, London School of Economics and Political Science, vol. 70(277), pages 31-53, February.
  16. Bruce Sacerdote, 2000. "Peer Effects with Random Assignment: Results for Dartmouth Roommates," NBER Working Papers 7469, National Bureau of Economic Research, Inc.
  17. Estelle James, 1978. "Product Mix and Cost Disaggregation: A Reinterpretation of the Economics of Higher Education," Journal of Human Resources, University of Wisconsin Press, vol. 13(2), pages 157-186.
  18. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
  19. Avery, Christopher & Fairbanks, Andrew & Zeckhauser, Richard, 2001. "What Worms for the Early Bird: Early Admissions at Elite Colleges," Working Paper Series rwp01-049, Harvard University, John F. Kennedy School of Government.
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