The Importance of Relative Performance Feedback Information: Evidence from a Natural Experiment using High School Students

Ghazala Azmat and Nagore Iriberri

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: We study the effect of providing relative performance feedback information on performance underpiece-rate incentives. A natural experiment that took place in a high school offers an unusualopportunity to test this effect in a real-effort setting. For one year only, students received informationthat allowed them to know whether they were above (below) the class average as well as the distancefrom this average. We exploit a rich panel data set and find that the provision of this information ledto an increase of 5% in students' grades. Moreover, the effect was significant for the wholedistribution. However, once the information was removed the effect disappeared. To rule out theconcern that the effect may be driven by teachers within the school, we verify our results usingnational level exams (externally graded) for the same students, and the effect remains.

Keywords: school performance; relative performance; piece-rate; feedback; natural experiment; socialcomparison; self-perception; competitive preferences (search for similar items in EconPapers)
JEL-codes: I21 M52 C30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-edu and nep-lab
Date: 2009-03
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