Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 596: Understanding Peer Effects: On the Nature, Estimation and Channels of Peer Effects
Jan Feld () and Ulf Zölitz ()
Additional contact information
Jan Feld: School of Economics and Finance, Victoria University of Wellington, Postal: P.O. Box 600, Wellington 6140, New Zealand
Ulf Zölitz: Department of Economics, Maastricht University, Postal: P.O. Box 616, 6200 MD, Maastricht, The Netherlands
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.
Keywords: Peer effects; higher education; estimation bias
59 pages, First version: June 2014. Revised: October 2015. Earlier revisions: August 2014, October 2015.
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