Ability tracking or comprehensive schooling? A theory on peer effects in competitive and non-competitive cultures

Kathrin Thiemann

Journal of Economic Behavior & Organization, 2017, vol. 137, issue C, 214-231

Abstract: We develop a model of student decision making that shows that it depends on the culture of competitiveness in a country or region whether it is optimal to choose a school design with ability tracking or comprehensive schooling. Students with different cultural background differ in their concern for relative position in the classroom, which is modeled by reference-dependent preferences. We contrast competitive cultures, where students compare their performance with the best performance in class, and non-competitive cultures where the reference point is the average performance. Taking into account students with heterogeneous abilities, we show that the average performance in competitive cultures is maximized under comprehensive schooling and in non-competitive cultures under ability tracking. Segregation of abilities, however, always leads to a higher dispersion of performances.

Keywords: Loss aversion; Reference dependence; Ability tracking; Peer effects; Culture; Competitiveness (search for similar items in EconPapers)
JEL-codes: D83 I28 J24 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:137:y:2017:i:c:p:214-231

DOI: 10.1016/j.jebo.2017.03.005

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