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Endogenous Social Interactions: Which Peers Matter?

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  • Tatsi, Eirini

Abstract

This paper compares endogenous social interactions models to determine which one fits the classroom reality best. The analysis uses data from German 9th-graders and considers the effect of the best and worst peers scores, the peers sum and peers average scores on own achievement. Although each model seems plausible when estimated separately, comparison and a selection test point to the classmates average model, meaning that group-based policies are effective. The worst peers model comes second, followed by the best peers and the sum of peers models. Examination of different-ability students responses to increases of average peer achievement reveals either competition for the first place or last-place aversion. Conditional on own course preferences, own and peer characteristics, spillovers transmit only through cognitive ability. Therefore, regrouping on the basis of characteristics such as immigration background is obsolete. Policies should aim at low achievers in small enough classrooms because only then single-student influences can change the social norm. By improving the average through the worst, the best become even brighter.

Suggested Citation

  • Tatsi, Eirini, 2015. "Endogenous Social Interactions: Which Peers Matter?," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113168, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc15:113168
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    File URL: https://www.econstor.eu/bitstream/10419/113168/1/VfS_2015_pid_132.pdf
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    References listed on IDEAS

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    1. Vincent Boucher & Yann Bramoullé & Habiba Djebbari & Bernard Fortin, 2014. "Do Peers Affect Student Achievement? Evidence From Canada Using Group Size Variation," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(1), pages 91-109, January.
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    6. Scott E. Carrell & Bruce I. Sacerdote & James E. West, 2013. "From Natural Variation to Optimal Policy? The Importance of Endogenous Peer Group Formation," Econometrica, Econometric Society, vol. 81(3), pages 855-882, May.
    7. Jane Cooley Fruehwirth, 2013. "Identifying peer achievement spillovers: Implications for desegregation and the achievement gap," Quantitative Economics, Econometric Society, vol. 4(1), pages 85-124, March.
    8. Liu, Xiaodong & Patacchini, Eleonora & Zenou, Yves, 2014. "Endogenous peer effects: local aggregate or local average?," Journal of Economic Behavior & Organization, Elsevier, vol. 103(C), pages 39-59.
    9. Victor Lavy & Olmo Silva & Felix Weinhardt, 2012. "The Good, the Bad, and the Average: Evidence on Ability Peer Effects in Schools," Journal of Labor Economics, University of Chicago Press, vol. 30(2), pages 367-414.
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    Cited by:

    1. 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.
    2. Hahn, Youjin & Islam, Asadul & Patacchini, Eleonora & Zenou, Yves, 2015. "Network Structure and Education Outcomes: Evidence from a Field Experiment in Bangladesh," IZA Discussion Papers 8872, Institute of Labor Economics (IZA).
    3. Youjin Hahn & Asadul Islam & Eleonora Patacchini & Yves Zenou, 2015. "Teams, Organization and Education Outcomes: Evidence from a field experiment in Bangladesh," Monash Economics Working Papers 35-15, Monash University, Department of Economics.
    4. Díaz, Carlos & Patacchini, Eleonora & Verdier, Thierry & Zenou, Yves, 2021. "Leaders in juvenile crime," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 638-667.

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    More about this item

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • I20 - Health, Education, and Welfare - - Education - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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