Understanding Peer Effects: On the Nature, Estimation, and Channels of Peer Effects

Jan Feld and Ulf Zölitz

Journal of Labor Economics, 2017, vol. 35, issue 2, 387 - 428

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. Building on Angrist’s research, we further show that classical measurement error in a setting where group assignment is systematic can lead to a substantial overestimation of peer effects. However, when group assignment is random—like in our setting—peer effect estimates are biased toward zero.

Date: 2017
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Related works:
Working Paper: Understanding peer effects - On the nature, estimation and channels of peer effects (2016)
Working Paper: Understanding peer effects: on the nature, estimation and channels of peer effects (2016)
Working Paper: Understanding Peer Effects: On the Nature, Estimation and Channels of Peer Effects (2015)
Working Paper: Understanding Peer Effects: On the Nature, Estimation and Channels of Peer Effects (2015)
Working Paper: Understanding Peer Effects: On the Nature, Estimation and Channels of Peer Effects (2015)
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