How Social Ties Affect Peer-group Effects: a Case of University Students
Abstract: We study how the individual performance of university students is influenced by characteristics and achievements of peers from individual’s social network. Data on network ties in randomly formed student groups enables us to address the endogeneity problem and disentangle the influence of peers’ performance from the effect that a peer’s background has on students. We show that a one-point increase in the average GPA of peers is associated with an increase in an individual student’s own GPA of approximately one fourth. No effect from a student’s classmates is found in the model that assumes group interactions occur between group mates.
